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Malaysia Finally Confirms New Air Passenger Taxes

by Mary Swire, Tax-News.com, Hong Kong

31 October 2011


After the increases were delayed in September, Malaysia Airports has now announced that new rates of the international passenger service charge (IPSC) and aircraft landing and parking charges (ALPCs) will be implemented from November 15, 2011.

Malaysia Airports had previously announced that the government had approved the new charges, which were gazetted on July 13, in line with the operating agreement signed between the government and Malaysia Airports in February 2009. However, in September, they were put on hold, pending further review.

Having completed the review, it was disclosed that Malaysia Airports has been informed by the Ministry of Transport that approval has been given to implement the new rates. The new IPSC rates will take effect on November 15, 2011, and will be applicable to tickets purchased from that day onwards, while the ALPCs will be increased in three stages effective in January 2012, January 2013 and January 2014.

The IPSC, paid by departing international passengers, will increase from MYR51 (USD16.60) to MYR65 at all of Malaysia’s airports, apart from the low-cost carrier terminal at Kuala Lumpur International Airport and Terminal 2 at Kota Kinabalu International airport, where the charge will rise from MYR25 to MYR32.

In addition, the aircraft landing charge will be increased by 9% in January 2012, followed by two more 9% increases in January 2013, and January 2014. In like manner, the aircraft parking charge will increase by 18% on January 2012, January 2013 and January 2014.

Transport Minister Kong Cho Ha said, while the decision to revise the airport charges was first made in 2009 but was not implemented, “the government has to fork out some MYR100m a year to pay for the charges,” and it was unfair for taxpayers to bear the extra cost of airport charges for international travellers. He added that the new charges were still the lowest among airports in the region.

TAGS: tax | air passenger duty (APD) | aviation | travel and tourism | Malaysia

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