IDEAS: Absurd to charge consumers to cover operational costs

Think tank takes Mavcom to task, says regulators should be funded without creating additional taxes.

PETALING JAYA: A think tank today questioned the Malaysian Aviation Commission’s (Mavcom) move to charge passengers in order to cover its operational costs.

Calling the move absurd, the Institute for Democracy and Economic Affairs (IDEAS) said it also contradicted with Mavcom’s mission to promote a commercially viable, consumer-oriented and resilient aviation industry.

“The first question that needs to be answered is when Mavcom was created, which agency did they replace and why can’t the budget be transferred?

“Or is this just another layer of unnecessary bureaucracy that increases the cost of doing business and further burdens the rakyat?” IDEAS chief executive Wan Saiful Wan Jan said in a statement.

With Mavcom’s plan to charge RM1 per passenger, Wan Saiful said, the commission was expected to raise RM30 million each year.

Even if a regulator was needed, he said, this should be funded without creating additional taxes.

“The cost of living is already high and we don’t need to increase the cost of travelling, too.”

Once the precedence was set that a regulator could charge users, he said, this could have a detrimental impact on the tourism industry.

“There are other models that we can consider.

“For example, the Commission for Aviation Regulation of Ireland does not charge passengers. Instead, it spreads the costs across various entities in the form of levies.

“The Commission for Aviation Regulation of Ireland generates its revenue through fees and levies. In 2008 alone, it managed to collect €4.467 million of fee income without transferring the burden to the consumers.”

According to Wan Saiful, the total contribution of travel and tourism to Malaysia’s gross domestic product (GDP) was RM167.5 billion, which came to 13.7% of GDP in 2016. -FMT

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