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Thursday, January 23, 2014

Should we pay service charge?

Published: Tuesday January 21, 2014 MYT 12:00:00 AM 
Updated: Tuesday January 21, 2014 MYT 11:22:44 AM

I WELCOME the establishment of the Special Cabinet Committee that is tasked to root out the underlying causes of escalating prices of goods and services that are affecting our nation (The Star, Dec 16).

We ushered in the New Year accompanied by the price hike of our basic goods and services.

It portends a bumpy ride ahead for all Malaysians for the next three years. According to local economists, the subsidy rationalisation undertaken by the Government and the implementation of GST in 2015 is expected to further erode our purchasing power.

Consequently, we have to adjust and stretch our disposable income as the skyrocketing cost of living will affect our consumption pattern.

As we tighten our belts, I hope that the newly established committee can look into the issue of service charge currently imposed by all restaurants, kopitiams, cafés and hotels.

The rate of service charge varies from 5% to 10%. If the service charge is 10% and your bill is RM100, you have to pay an extra RM10 as service charge.

It is a progressive charge as you pay more if you order more food.

There is a difference between service tax and service charge.

Unlike service tax which is regulated by law and collected by the Customs Department, the service charge imposed is not predicated on any legal instrument.

The service charge is collected by restaurants, kopitiams, cafés and hotels and has become an additional source of income for them.Unfortunately this is a burden to us.

The service charge is supposed to be a “tip” given by customers. But the act of tipping is not mandatory.

It is a voluntary act by customers who are satisfied with the quality of the food and service rendered.

Therefore, the act of tipping is a free choice of satisfied customers and it should not be imposed by incorporating it into our bill without our consent.

The current practice of imposing service charge is legally incorrect and should be removed from the bill.


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