Bangladesh-Malaysia Tourism Bond Strengthens

In the recently presented FY24 budget, the government has suggested significant hikes in travel tax rates to discourage unnecessary foreign trips. However, this decision has raised concerns among migrants and students who argue that they should be exempted from the burden. The increased tax will add financial pressure on remittance earners and students pursuing higher studies abroad. Migrants, who go overseas for work rather than leisure, find the tax hike unfair and believe it will escalate migration costs. Various associations and experts have called on the government to reconsider the tax increase for these groups.

The proposed budget for the 2023-24 fiscal year seeks to allocate Tk 6,597 crore to the Civil Aviation and Tourism Ministry, with the goal of modernizing the aviation sector and expanding the tourism industry to international standards. This allocation represents an increase of 17.2 percent, amounting to Tk 969 crore more than the previous fiscal year.

Dhaka is poised to welcome four new five-star hotels in the next three years, catering to the growing demand for luxury accommodation in Bangladesh. Swissôtel Dhaka, a collaboration between Bengal Hotels and Resorts and Swissôtel Hotels & Resorts, will boost the city's reputation as an international event destination and attract high-profile guests. Additionally, Borak Real Estate Ltd (BREL) has partnered with Indian Hotels Company Ltd (IHCL) to operate Taj and Vivanta branded hotels in Gulshan.

The Malaysian High Commissioner to Bangladesh, emphasized the growing significance of the tourism sector in strengthening bilateral relations between Bangladesh and Malaysia. During a B2B networking dinner in Dhaka, she highlighted Malaysia's aim to regain 26 million tourist arrivals, with over 10 million arrivals recorded in 2022, including approximately 59,000 visitors from Bangladesh. Leisure tourism plays a pivotal role in attracting Bangladeshi tourists to Malaysia, offering a captivating blend of natural landscapes, vibrant cities, and rich cultural heritage.

The National Board of Revenue (NBR) is planning to increase travel tax by 20-50% in the upcoming budget for FY24. Currently, the tax is Tk500-4,000 for each outbound traveler depending on their destination countries and mode of transportation. Economists opine that the government should widen the tax net rather than increase tax pressure as people are already hit hard by inflationary pressure. The chairman of the Research and Policy Integration for Development believes that no taxes should be imposed on outbound migrant workers.

The tourism industry in Bangladesh has been booming since the end of the pandemic shock, resulting in impressive financial performance from most companies in the travel and leisure sector. Three out of four companies in the DSE travel and leisure sector have released their financial reports for the July-March period, with two showing impressive financial performance. These companies are Sea Pearl Beach Resort & Spa Limited, Unique Hotel & Resorts PlC, The Peninsula Chittagong Limited, and Bangladesh Services Ltd.