October 13, 2025
PETALING JAYA – The proposal to grant a special income tax relief of up to RM1,000 for local travel and cultural spending under Budget 2026 is expected to give a strong boost to domestic tourism, say industry players.
They believe it will also benefit food and beverage outlets and small businesses, creating a wider economic spin-off as Malaysians explore more of the country, rediscovering the diverse attractions while supporting hotels and theme parks.
Malaysian Association of Tour and Travel Agents president Nigel Wong said the initiative will motivate people to reconnect with Malaysia’s history and culture.
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“The RM1,000 tax relief will encourage people to attend local events and festivals while learning about our heritage.
“Malaysians love to travel, so through their engagement and what they share online, they help tell Malaysia’s story,” he said.
Wong said preparations for Visit Malaysia 2026 (VM2026) had begun among industry players through close collaboration with the government and private sector.
“Next year, especially with the tax incentives to attract more tourists, our efforts will be more targeted.
“Hotels have also been preparing as well, but shortage of manpower remains a long-standing issue.
“Hopefully, the spillover effects from VM2026 will help draw more talent into the tourism industry,” he added.
Malaysian Association of Theme Parks and Family Attractions president Tan Sri Richard Koh said the incentive could significantly strengthen the domestic tourism ecosystem.
“It will boost local tourism spending by encouraging Malaysians to travel within the country.
“This also helps strengthen the industry’s capacity before welcoming global tourists in 2026,” he said.
Koh added that the measure will particularly benefit middle- and low-income groups who may have postponed travel due to financial constraints.
“Many will now be more motivated to explore destinations within Malaysia.
“The association is also ramping up preparations by upgrading facilities and promoting new products,” he said.
Koh announced that Malaysia’s first-ever expo on theme parks, family attractions and local cuisine would be held at the World Trade Centre Kuala Lumpur from Oct 31 to Nov 2.
Malaysian Inbound Tourism Association president Mint Leong said the RM1,000 relief will stimulate domestic travel and renew interest in local destinations.
“This is a good time to use the RM1,000 relief to explore local destinations and discover more of our country.
“Domestic tourism can create a large economic impact if more Malaysians travel locally.
“Travel agents and operators have started preparing tour packages in response to the incentive,” she said.
Malaysian Tourism Federation president Dr Sri Ganesh Michiel said the tax relief will benefit the hotel sector, especially budget and mid-range establishments.
“The tax rebate will definitely help promote domestic travel, but the government should clarify whether hotel stays will be included under the relief.
“If legitimate hotel receipts are allowed, it will also help the hotel sector tremendously.
“In 2020, when a similar measure was introduced under the Economic Stimulus Package, hoteliers saw a 35% to 40% boost in occupancy rates,” he said.
He added that the incentive will also encourage more Malaysians to visit secondary destinations such as Kelantan towns, Muar and Kluang in Johor and Temerloh in Pahang.
“These smaller towns have unique attractions – from river cruises to local food trails.
“With improved rail connections such as the Electric Train Service, weekend trips are becoming more popular,” he said.