LGE: Restaurants & Coffee Shops Should Reduce 10% Service Charge Because It’s Too High

Prior to the implementation of the Sales and Services Tax (SST), restaurants and coffee shops were charging customers GST (Goods and Services Tax) along with service charge.

Currently, GST is no longer charged after SST made its come back in September 2018 but customers are still taxed with 10 per cent of service charge in restaurants and coffee shops.

For illustration purposes | source: vince quek

In light of that, The Star reported that Finance Minister Lim Guan Eng has urged restaurants and coffee shops to be “reasonable” and reduce the service charge because it’s too high.

Speaking at the Lantern Festival at Penang Hill, the finance minister said,

“Service charge is collected by the restaurants and coffee shops for their employees, so they can pay them better salaries.”

Source: the star

He then continued,

“We have made many changes to make it easier for restaurants and coffee shops so the impact of SST is lesser on them.”

When Lim was asked if there was to be a guideline on the percentage of service charge, he responded by saying that he was requesting restaurants and coffee shops to reduce their service charges. He then added that he wasn’t talking about taking any action.

“I am asking them to be reasonable to their customers,” he stated.

Source: fmt

On a different matter, Lim was asked about comments by Datuk Seri Najib Razak following Lim’s acceptance over the hike in goods’ prices due to SST. Nonetheless, he shared that even though the prices have gone up, the impact of SST is still half of GST. Do you agree with him?

“We hope the price of goods is controlled, we see the price of things has reduced. We have seen the effect of SST, we did not say SST would reduce the prices but the impact would be half of GST. We will know the complete impact of SST in one year’s time.”

“The estimated annual GST collection was RM44 billion, while SST will only net RM21 billion,” he explained.

Source: fmt

Therefore, he told Najib not to confuse people and that he should speak “based on facts and figures”. 

“He lost the previous elections because of the burden of GST,” Lim reminded.

Najib had also previously said (via Facebook) that Lim’s admission that the prices of goods have gone up since SST kicked in contradicts Tony Pua’s recent claim that the prices of goods will reduce after the implementation of SST.

Source: the star

Do you think that the current 10% service charge is unreasonable and should be reduced? Let us know in the comments below! 

Also read: The Prices of These 5 Car Brands Have Reduced By Up to RM3,000 After SST