FOR the upcoming Budget 2021, the government should consider reducing passenger service charges (PSC) for international flights at all airports in the country in order to attract foreign tourists once the border reopens, says an academician.
University Malaysia Sarawak’s (UNIMAS) economics and business faculty senior professor Datuk Shazali Abu Mansor said that a cheaper airport tax would help to attract foreign travellers to the country and create a greater a spillover effect for the economy to boost gross domestic product (GDP) growth.
“We are relying on tourism so we need to be more competitive compared to our neighbouring countries. It is a strategic move and this is an area that the government can consider to subsidise in Budget 2021 to attract more tourist and bring in more money into the country,” he told Bernama.
The tax is charged on all passengers departing the country for the use of airport facilities, and is collected by the airlines on behalf of the airport operator, Malaysia Airports Holdings Bhd.
Shazali pointed out that the airport should not be used as a platform to make a profit and the PSC collected should be just enough to cover the necessary costs.
“Sometimes we can see that the airfare is quite low, but the high airport tax adds up to the travel cost, making it more expensive,” he explained.
Looking back at July 15, the Tourism, Arts and Culture Minister Datuk Seri Nancy Shukri told Dewan Rakyat that Malaysia’s tourism sector is estimated to suffer losses of up to RM45 bil this year due to the closure of the country’s borders to curb the COVID-19 pandemic.
She said of the total, the international tourism segment was projected to suffer losses of more than RM31 bil, and the rest would be in the domestic segment.
At RM86.14 bil, the tourism sector is the third biggest contributor to Malaysia’s GDP growth after manufacturing and commodities. – Oct 30, 2020
