Ministry questions decision to impose service charge

16 Apr 2015 / 20:02 H.

    PUTRAJAYA: The Domestic Trade, Cooperative and Consumerism Ministry has questioned the insistence of some hotels and restaurants in imposing the 10% service charge by claiming that it is part of their employees' income.
    Citing examples of some premises which do not impose the service charge, ministry secretary-general Datuk Seri Alias Ahmad said the matter would not be an issue if the businesses restructured the salaries of their staff.
    “There are many hotels and restaurants which I can name that do not impose these charges. The question is how can they survive without charging for their services?
    “And why aren’t the others following the footsteps of the said premises?” he said in a press conference on the latest update on the Goods and Services Tax (GST) at the ministry’s complex, here today.
    Alias said it would benefit all parties if the hotels and restaurants comply with the current salary system and minimum wage requirements
    “It would be great if they can transfer the service charges that they are imposing into their input costs for the salary structure. On whether they are willing to absorb the cost is up to the organisations,” he said.
    He added that various consumers associations have called for the abolishment of the service charge, with the Federation of Malaysian Consumers Association (Fomca) and Malaysian Muslim Consumers Association (PPIM) urging for it to be scrapped.
    Alias added that he will chair a meeting next Monday with other agencies, consumers associations, unions and associations from hotels and the food and beverages industry to discuss the issue.
    “We hope to find a solution from that meeting with the stakeholders, or come up with a fresh view on this matter.
    “We do not want to make a unilateral decision without first engaging with all parties," he said.

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