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Review of Tax Incentive for Tour Operators

Updated: Jul 17, 2023

Update: The Ismail Sabri Government Budget is no longer applicable.


Malaysia's national budget for 2023 was re-tabled again in February 2023; for more info, please visit - https://www.ccs-co.com/post/budget-2023-malaysia-madani.


This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023.

Response from MOF (Ministry of Finance): Not extended/Discontinued
Current Position

As part of Budget 2018, tour operators have been provided with tax incentives, including the following: 

  1. a tax exemption of 100 percent on statutory income derived from the business of operating tour packages to Malaysia with the participation of at least 750 inbound tourists per year; and

  2. a tax exemption of 100 percent on statutory income derived from the business of operating tour packages within Malaysia with participation of at least 1,500 local tourists per year.

During the COVID-19 pandemic, the tax incentive was reviewed as follows:

  1. extended for a period of 2 years from the year of assessment 2021 to the year assessment 2022; and

  2. tourism packages within Malaysia with participation of at least 200 local tourists per year and nil for inbound tourists for tourism packages to Malaysia

Proposal [This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023]

It is proposed that the following requirements of tax incentive programmes be revised to increase tourism activities in Malaysia during the transition phase to the endemic phase:

  1. tourism packages within Malaysia with the participation of at least 400 local tourists per year; or

  2. tourism packages to Malaysia with the participation of at least 200 inbound tourists per year; and

  3. tax incentive is extended for a year.



Effective Date

For the year of assessment 2023.



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