Sarawak welcomes full tourism tax distribution, hopes for substantial share

KUCHING (March 6): Sarawak hopes to receive a substantial share of tourism tax revenue following the federal government’s decision to channel 100 per cent of the collections directly to the states, said Dato Sri Abdul Karim Rahman Hamzah.

Welcoming the move, the Sarawak Minister of Tourism, Creative Industry and Performing Arts said the state looks forward to benefiting from the new arrangement, although the exact distribution formula has yet to be clarified.

“This is very much welcome news and I do hope that Sarawak will get a big share out of it,” he told a press conference here on Friday.

Abdul Karim said he believes the federal government would have a formula or mechanism to determine how much each state will receive.

“I don’t know what the formula for the distribution is, but I do believe there will be one to determine how much is to be disbursed or returned to each state.

“Probably they will have some kind of mechanism based on the number of tourists or the amount of money collected through taxes from hotels and the hospitality sector, with a portion of it given back to the respective states,” he said.

He reiterated that Sarawak would welcome any additional funds channelled by the federal government, noting that the state requires significant resources for development.

“Well, as it is, it is very much welcome. Anything that is forthcoming from the federal government, whether it is tourism tax, development funds under Article 112, or an increase in royalty or others, we will always welcome.

“Sarawak is a very big state. We need as much funds as possible to develop the state better,” he said.

His remarks came following an announcement by the Ministry of Finance that the National Finance Council had agreed to increase federal allocations to state governments, including the distribution of tourism tax revenues.

In conjunction with Visit Malaysia Year 2026, the federal government will channel 100 per cent of tourism tax collections directly to the respective states, compared with the current practice of sharing only 50 per cent.