Airport Tax – Pay or Don’t Pay, That is not the Question

Benjamin Franklin once said that in this world, nothing is certain but death and taxes. While I hope that many people would not view life in such a pessimistic way, I must admit that the recent news concerning Malaysia’s International Airport has deeply shaken my views concerning taxes.

According to the Sun newspaper (21st April 2008), passengers who use the Kuala Lumpur International Airport have been paying an additional Rm2 to Rm6 in airport tax for the last six years. This unfair tax is incurred due to the deal between the government and Express Rail Link Sdn Bhd (ERLSB) which operates the Express Rail Link (ERL).

The terms of agreement for the Rm2.8 billion ERL project involved putting aside a portion of of the airport taxes paid by passengers departing from the airport for the company (ERLSB).

– Rm2 for domestic passengers

– Rm6 for International Travelers as well as the Low Cost Carrier Terminal (LCCT).

 

The rationale of the agreement (no matter how irrational it might sound) was to ensure a return on investment for the service which started in 2002. The ownership of ERLSB is divided between YTL Corporation (50%), Tabung Haji Technologies Sdn Bhd (40%), and Nadicorp Holdings Sdn Bhd (10%).

KLIA handles some 25 million passengers last year. Sources say that ERL would be receiving around Rm80 million a year from airport tax. I guess Benjamin Franklin was right.

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  1. […] jamesesz wrote an interesting post today on Airport Tax – Pay or Donât Pay, That is not the QuestionHere’s a quick excerptBenjamin Franklin once said that in this world, nothing is certain but death and taxes. While I hope that many people would not view life in such a persimistic way, I must admit that the recent news concerning Malaysia’s International … […]



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