KUALA LUMPUR, 10 July 2026: The Malaysian Association of Tour and Travel Agents (MATTA) has cautioned that excluding tourism transport vehicles from the government’s diesel subsidy programme will impact Malaysians as well as tour operators.
MATTA acknowledges the government’s commitment to fiscal prudence but firmly disputes the recent characterisation by the Minister of Finance II, Datuk Seri Amir Hamzah Azizan, that diesel subsidies for tourism transport operators would only benefit foreign tourists.
MATTA strongly believes that a broader view of how these vehicles are used would support the case for their inclusion in the scheme.
“Tourism vehicles serve both Malaysian and international tourists every day. Licensed tourism transport operators provide services not only for inbound visitors but also for domestic holidaymakers, school groups, corporate events, incentive travel, religious pilgrimages, educational tours, and community programmes.
It is therefore incorrect to assume that diesel subsidies for tourism transport operators would benefit only foreign tourists.
To say this subsidy only helps foreigners ignores the reality of how our tourism transport industry operates. This decision, if left unchanged, will raise fares for Malaysians and may even force them to consider utilising unlicensed service providers,” said MATTA President Nigel Wong.
The removal of diesel subsidies will directly increase operating costs for tourism transport operators, which will inevitably be passed on through higher fares and more expensive travel packages for both Malaysians and international visitors.
As the country accelerates its Visit Malaysia 2026 campaign, higher transport costs threaten to undercut the very affordability that drives domestic tourism and inbound arrivals.
More affordable tourism services would encourage Malaysians to explore destinations within the country rather than travel abroad, while also enhancing Malaysia’s appeal to international visitors.
This would support the growth of both domestic and inbound tourism, in line with the government’s objectives to strengthen the tourism sector.
Higher tourism activity generates a multiplier effect throughout the economy. Increased visitor arrivals and domestic travel create greater business opportunities for hotels, restaurants, attractions, retailers, transport operators, and local communities.
This translates into higher business revenue, more employment opportunities, increased tax collections, greater foreign exchange earnings, and stronger economic growth. In the longer term, these economic benefits could outweigh the costs of providing targeted diesel subsidies to licensed tourism transport operators.
This issue is especially significant for destinations such as Sabah, where tourism relies heavily on road transportation due to the state’s vast geography and dispersed attractions.
High transport costs risk making destinations across Malaysia less competitive and could discourage both domestic and international travel, particularly as the nation intensifies its Visit Malaysia 2026 campaign.
Tourism is an intensely competitive industry. Malaysia is competing directly with neighbouring Southeast Asian destinations such as Thailand, Indonesia, Vietnam, and the Philippines, many of which continue to provide various forms of support to their tourism sectors. Any increase in operating costs reduces Malaysia’s competitiveness and may divert visitors to alternative destinations.
Since the onset of the global energy price crisis, MATTA has worked closely with the Ministry of Tourism, Arts and Culture (MOTAC) to address the challenges faced by the tourism industry.
MATTA has presented its case to the Ministry of Finance for a review of the diesel subsidy programme’s exclusions.
MATTA’s request for a review
Review the exclusion of licensed tourism transport operators from the diesel subsidy programme, considering the broader Malaysian public they serve.
Engage with MOTAC and industry stakeholders to explore a targeted, well-governed subsidy mechanism for licensed operators.
Consider tourism transport as a strategic enabler of both domestic mobility and the tourism economy, in support of VM 2026.
The government has repeatedly emphasised the importance of tourism as a key contributor to the national economy. Ensuring that tourism transport operators remain competitive is fully aligned with that objective and with the aspirations of Visit Malaysia 2026.
(Source: MATTA)
