Passengers flying out of Malaysia to pay up to RM150 for departure tax starting next month

During the Budget 2019 announcement, the government had announced a new form of tax that will be charged to travellers flying out of Malaysia. The departure levy was supposed to start in June with a flat fee of RM20 for ASEAN countries and RM40 for other countries but now there’s a new rate which is lower.

Based on the Federal Government Gazette that was published on 31st July 2019, the departure levy will be imposed on the 1st September 2019 on any person that leaves Malaysia. The rates will be based on the seat class and destination.

For those flying from Malaysia to ASEAN countries which include Brunei, Cambodia, Indonesia, Laos, Myanmar, Philippines, Singapore, Thailand and Vietnam, it will cost you RM8 for economy class and RM50 for other classes.

If you’re flying beyond ASEAN, economy class passengers will be charged a levy of RM20. For those travelling in premium class, you’ll have to fork out RM150.

There are a couple of exemptions as well. The departure levy will not be imposed on infant and children that are less than 2 years old. Transit passengers that are arriving in Malaysia to catch a connecting international flight are also excluded and the transit period must not exceed 12 hours.

The tax is also exempted for the crew on duty as well as anyone driving or riding any type of vehicle for personal use, and this also includes pillion riders on such vehicle.

The exemption list also includes operators of both water and land vehicles as well as any government operating any type of vehicles carrying passengers out from Malaysia. Commercial operators that provide chartered air services to transport workers to oil rig or platform are excluded as well.

According to the Departure Levy Act 2019, anyone that fails to pay the departure levy where applicable may be fined up to RM500,000 or imprisoned up to three years, or both. It is estimated that the government could collect between RM900 million to RM1 billion annually from the levy.

When the departure levy was mentioned during the tabling of Budget 2019, Finance Minister, Lim Guan Eng, said that the proposal was intended to encourage domestic tourism. He also said that the earlier proposed rate for RM20 for ASEAN countries and RM40 for non-ASEAN destinations was consistent with the rates charged by other countries. The minister provided some examples such as Thailand (US$20), Hong Kong (US$15) and Japan (US$10).

A couple of weeks ago, the Tourism, Arts and Culture Ministry had requested to defer the departure levy to after Visit Malaysia 2020 as there were concerns that the new tax would affect the arrival of inbound tourists. It isn’t mentioned how this new tax will be collected but it is likely to be included in the air ticket price.

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