Malaysia

The Malaysian government has released a list of new economic incentives aimed at boosting the country's tourism industry.

The multi-pronged program intends to help travel agencies and tour operators overcome the negative impact of the recent war in Iraq and the prevailing uncertainty surrounding SARS or Severe Acute Respiratory Syndrome.

Malaysian Prime Minister Datuk Seri Dr Mahathir Mohamad made the announcement late last month.

According to Mahathir, the objectives of the program are to generate economic activity and bolster the country's economic fundamentals.

Malaysia goes for the big catch with its recently announced program to aid the tourism sector.

The program includes the establishment of a 265-million dollar fund, called the Special Relief Guarantee Facility, for tourism sector operators.

The government has also offered a five percent discount on electricity bills for hotels from June to December of this year.

During the same period, hotels and restaurants will also enjoy an exemption from service tax, while taxi drivers will receive a 50 percent rebate on road tax.

As part of the stimulus package, the government also abolished the service tax on complimentary rooms starting this month. It has also eased income tax payment deadlines for tour operators from June to December of this year.

Employees, who have taken salary cuts due to a downturn in business, will also be allowed to restructure or reschedule their loans with financial institutions.

The Malaysian Association of Tour and Travel Agents (MATTA) praised the move.

MATTA president Y.M Dato Seri Tunku Iskandar Tunku Abdullah said the special relief fund would boost business and tourism activity.

Meanwhile, Malaysian Association of Hotels (MAH) president Mohd Ilyas Zainol Abidin said the program provides relief to hotel owners and operators.

The MAH president also pointed out that the five per cent discount in electricity bills would help hoteliers cope with the present situation and stimulate domestic tourism, creating much need income for hotels.

Meanwhile, Minister of Culture, Arts and Tourism Malaysia Datuk Paduka Abdul Kadir Sheikh Fadzir revealed that the government asked financial institutions to restructure loans given to tourism operators.

He said financial institutions, as part of the government's request, might review interest rates to offer its clients some relief.

Abdul Kadir added that the ministry set aside around 236.8 million dollars in a bid to revive the country's tourism industry.

A total of 105.2 million dollars has been earmarked for a so-called Special Tourism Fund and another 123 million dollars for a Tourism Infrastructure Fund.

He also said tourism companies that want to avail of the financial assistance must first meet certain criteria, including registration with the ministry, a 60-percent local ownership with funds not exceeding 2.6 million dollars, and involvement in tourism-related activities.

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