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New Malaysia Foreigner Tax Shows The Mentality Of A Third World Country

Malaysia imposes an additional tax on foreigners, but it’s not the tax itself that’s appalling.

Every once in a while a government does something that makes you question its intellect. It can be the withdrawing from an extremely powerful geo-economic pact that it didn’t really bother to learn anything about; it can be the institutionalized refusal to believe in science, or data, or anything that’s empirically verifiable, really.

In Malaysia, such a move was the institution of an additional $2.50 (RM10) per room, per night flat tax on foreigners staying in hotels. Malaysians are exempt. So if you happen to be from another country, each time you stay in a hotel here you’re paying the government an extra $2.50 for the privilege.

This new tax goes on top of the 15% of other taxes that the government already applies to accommodation, and the hope is that it will net the state coffers an extra $50 million per year.

$2.50 per night may not seem like a lot at first, but if you’re staying in a $10 hotel room, you are now actually going to pay $12.50, of which 32% is going to the government — not even the establishment that’s doing the work and providing the service.

Looked at another way, a solo tourist is now going to be taxed an extra $75 per month to travel in Malaysia. If he or she stays for the full 90 days of their visa, they are going to be penalized an additional $225 just for bringing their money to Malaysia and (mostly) supporting local Malaysian businesses, rather than going to a place like Thailand, etc.

Now, I don’t really care about this too much. I travel for work, so I can budget an extra $2.50 per night without having it do significant damage. Lately, I’ve been renting apartments, which are exempt from this tax. So, ultimately, this has little direct impact on what I’m doing.

Also, governments can do what they want with their countries. If they tell me that I need to pay an additional $2.50 per night, I pay it. I don’t whine and cry, stomp my feet at the reception counter, making a problem for some hotelier who has absolutely nothing to do with what I’m upset about.

I’m a traveler; I don’t complain, I don’t protest, I leave. And, honestly, an extra $2.50 per night isn’t going to tip the balance and make me leave a country as interesting and diverse as Malaysia.

However, my problem with this isn’t really the tax but the mentality behind it.

The viewpoint that foreigners are rich and privileged biological entities that exist for little other reason than to come to your country and give you their money is an archaic way of thought. This is the second decade of the 21st century — we are right in the thick of the globalism upheaval — and many of the grubbling poor states of the previous era are rapidly emerging today, with significant sects of their populations well-educated, relatively decently paid, and basically on par with anyone else in the world. Malaysia has a booming middle class, a vibrant tech sector, and attempts to market itself as modern.

But then it suddenly retracts into the backward thinking of a previous age, positing their foreign guests — i.e. the people who bring the country over $19.5 billion per year — as cash cows that money can be pluck from at will. In established economies like the USA, Europe, etc … taxing someone on the basis of their nationality is a non-starter.

However, duel pricing systems for foreigners and nationals is pretty much institutionalized in Malaysia. If you want to go to a museum, you may more than a local; if you want to go to an amusement park, you pay more than a local … which leads me to the point of this post:

How countries and cultures see themselves have a major impact on their trajectories, and it appears as if Malaysia still sees itself as a third world country.

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Filed under: Malaysia, Money, Tourism

About the Author:

Wade Shepard is the founder and editor of Vagabond Journey. He has been traveling the world since 1999, through 83 countries. He is the author of the book, Ghost Cities of China, and contributes to Forbes, The Diplomat, the South China Morning Post, and other publications. has written 3211 posts on Vagabond Journey. Contact the author.

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