By Karen Bong
KUCHING, March 6: Minister of Tourism, Creative Industry and Performing Arts Abdul Karim Rahman Hamzah has welcomed the federal government’s move to fully return Tourism Tax collections to states, saying Sarawak needs as much funding as possible to further develop the State, particularly its tourism sector.
He said the announcement by Prime Minister Anwar Ibrahim to channel 100 per cent of Tourism Tax revenue back to all states this year in conjunction with Visit Malaysia Year 2026 was encouraging news.
“Well, this is very much welcome news, and I do hope that Sarawak will get a big share out of it,” he said during a press conference after officiating the WAK Festival 2026 Call For Proposal Media Launch at Ridgeway today.
However, Abdul Karim said he was unsure about the formula that would be used to determine how the funds are distributed among states.
“I don’t know what the formula is for giving out the tax, but I believe there must be one on how a certain state receives the amount to be disbursed or given back,” he said.
He added that the mechanism could possibly be based on tourism performance indicators such as the number of visitors or the amount of tax collected from hotels and the hospitality sector.
Abdul Karim stressed that Sarawak would always welcome additional allocations from the federal government, whether through tourism taxes, development funds or other financial arrangements.
“As it is, it is very much welcome. Anything that is forthcoming from the federal government, whether it is a tourism tax, development fund under Article 112 of the Federal Constitution, an increase in royalty, or others, we will always welcome,” he said.
He noted that Sarawak’s vast size and development needs require significant financial resources to support infrastructure, tourism growth and economic development.
“Sarawak is a very big state, and we need as much funds as possible to develop Sarawak further,” he added.
The Ministry of Finance announced yesterday that the federal government will fully channel 100 per cent of Tourism Tax collections to states in line with Visit Malaysia Year 2026, marking a significant increase from the current practice of returning only 50 per cent.
The decision was made following the 2026 National Finance Council meeting chaired by Anwar, who is also Finance Minister.
Under the 2026 fiscal framework, total federal allocations to state governments are projected to reach RM10.5 billion, up from RM10.3 billion in 2025 and RM8.1 billion in 2022.
The council also agreed to enhance allocations under the Shared List Grants and streamline disbursement mechanisms to improve state cash flow sustainability.
Additionally, the scope of the State Road Maintenance Grants will be expanded to include repairs and widening of drains and ditches along state roads, as well as the procurement of Modular Steel Panel Bridges, commonly known as Bailey bridges, to strengthen infrastructure resilience.
Deputy Youth and Sport Development Minister Datuk Gerald Rentap Jabu, permanent secretary to MTCP Datu Sherina Hussaini, Padawan Municipal Council (MPP) chairman Tan Kai and WAK Festival director Donald Tan were among the distinguished guests present at the event.
Deputy Youth and Sport Development Minister Datuk Gerald Rentap Jabu, permanent secretary to MTCP Morshidi Fredrick, Padawan Municipal Council (MPP) chairman Tan Kai, WAK Festival director Donald Tan and Sarawak Tourism Federation assistant secretary general Awang Saifeluddin Awangku Karim were among the distinguished guests present at the event. — DayakDaily
