Freeze departure levy, passenger service charges to help tourism find its feet, think tank urges

A think tank has welcomed the provisions made for the tourism industry in the 2021 budget but urges the government to do more in terms of indirect measures for green zone travel bubbles, as efforts to cushion the economic fallout from the Covid-19 pandemic continue.

Jason Loh of EMIR Research said such measures could include an executive order to suspend the departure levy in an exemption under Section 31(1) of the Departure Levy Act 2019.

He also suggested suspending the passenger service charge for six months, after which a review could be held to determine the need for an extension.

“Substantially reduce the pick-up and drop-off charges for taxis, e-hailing cars, vans, and buses or coaches at KLIA and klia2 for three months, reviewable for the purpose of extending the suspension,” he added in a statement today.

He acknowledged the steps taken by the government in the budget, including the three-month extension of the Wage Subsidy Programme at a rate of RM600 a month for employees earning RM4,000 and below, but said more could be done in the short, medium and long term.

“Given that the tourism sector is indeed one of the most affected in terms of job security and losses, more could be done by the government under the purview of Budget 2021, that is in terms of implementation and adjustments to help preserve jobs, and even expand job opportunities both directly and indirectly.”

He also noted that the tourism industry is the third largest contributor in terms of foreign exchange earnings after manufacturing and commodities.

“It could be argued that the strategic focus of Budget 2021 for the tourism sector and related services is business resilience driven by capacity-building – which more or less mirrors that of previous stimulus packages underpinned by cushioning the business impact of Covid-19 and surviving to restart.”

He also suggested a number of direct measures including the formation of a special purpose vehicle to provide financing services such as bridge financing, working capital loans, and invoice factoring services, and interest-free financing for SMEs in the tourism sector.