KL postpones levy on foreign vehicles

The Straits Times, April 25, 2007
By Carolyn Hong, Malaysia Bureau Chief


KUALA LUMPUR - A PLANNED RM20 (S$8.85) charge on foreign-registered vehicles entering Malaysia from Singapore and Thailand has been put on hold so as not to put off tourists during Visit Malaysia Year 2007.

Tourism Minister Datuk Seri Tengku Adnan Mansor said the Cabinet had agreed to his calls for the suspension of the levy.

'As Minister of Tourism, I have been pressing for this, as we want more Singaporeans to come to Malaysia,' he told The Straits Times yesterday.

'The Minister of Transport agreed with us.'

The matter was discussed two weeks ago in Cabinet, which decided to suspend the levy to avoid hurting the tourism industry during this promotional campaign, but was not announced until yesterday.

The decision will be reviewed at the end of the year.

Datuk Seri Tengku Adnan said he hoped the levy would be scrapped altogether to avoid hurting tourism, but said he would cross that bridge later.

The Cabinet decided on the levy last year to offset the petrol subsidy paid by the government to keep fuel prices cheaper than in Singapore and Thailand. Petrol costs RM1.92 a litre in Malaysia, roughly half the price in Singapore.

Malaysia amended the law last year to permit collection of a levy, and electronic payment equipment was installed at immigration checkpoints in January, although no start date for the scheme was ever announced.

The idea was opposed by both Johor businesses and the tourism sector amid fears that it would deter Singaporeans from driving into Malaysia.

Singaporeans make up about 60 per cent of tourist arrivals in Malaysia. About 114,000 vehicles enter Malaysia from Singapore daily, of which 40,000 are estimated to be Singapore-registered cars.

Johor State Tourism and Environment Committee chairman Freddie Long welcomed the decision to delay the charge, and said he hopes it will be dropped altogether.

He told The Straits Times that Johor wants more Singaporeans to come to shop and dine, and for entertainment.

Malaysia is pulling out all the stops to woo Singaporean tourists, including beefing up security in Johor and being flexible with Singaporean-registered cars which have tinted windows that are illegal in Malaysia.

It aims to draw 10 million Singaporean visitors this year.

The total target is 20.1 million visitors, but Visit Malaysia Year got off to a slow start. In the first two months, Malaysia failed to hit its monthly target of 1.675 million visitors.

It drew 830,700 visitors in January and 810,759 in February, about 5 per cent more than the corresponding period last year. Arrivals are expected to pick up during the European summer season, when Malaysia usually sees a surge in long-haul tourists, and in December.