HOTELIERS are still in a state of confusion over the official increase in the sales and services tax (SST) from six percent to eight percent as per the government's announcement which was made late last year.
Malaysia Association of Hotels (MAH) vice-president Datuk Khoo Boo Lim said that from their understanding the hike to eight percent is for room charges only, whereas the SST remains at six percent on food and beverage sales.
"Unfortunately, there is lingering confusion and we are reaching out to the Royal Customs and Excise Department to provide clarification on this matter,” he said.
“We do not want to either overcharge or undercharge our clientele."
He said that the interest of customers often takes centre stage for players in the services industry, especially the ones offering food and hospitality products.
It is understood that to avoid any confusion the majority of the hoteliers will generally impose an eight percent rate on their rooms and food charges from today.
It would include services such as for butler, room service and other amenities provided within the hotel premises.
Khoo does not believe that the two percent hike in SST will deter consumers from patronising hotels, especially with the Ramadan month coming up soon.
"I think the increase of two percent is still bearable,” he said.
“But we hope that the overall living cost burden can be lowered. With that we can find ways to reduce our internal costs to make our tourism sector competitive cost-wise.”
Electricity and water services
Meanwhile, there have been calls to the government to exempt electricity and water supply from the SST.
The Energy Transition and Water Transformation Ministry has clarified said that a service tax would only be imposed for usage above 600kWj for electricity supply services.
With this, a total of 6.96 million or 84.3% of users in the residential category in Peninsular Malaysia are not affected by the tax reform for electricity services.
"About 15.7% or 1.29 million consumers using electricity exceeding 600kWj will incur an increase of between RM0.01 and RM45.48 in their monthly bills, or 0% to 1.66% a month following the hike in service tax rate,” the ministry said in a statement yesterday.
As for water supply, the Finance Ministry announced that bills for treated water will remain exempted from the SST.
Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali said recently the ministry has completed a special study on the possible effects of the SST hike from 6% to 8% as it kicks in today.
He said the results of the study will be presented to the National Action Council on Cost of Living (Naccol) for consideration soon.
The special study was already presented during an internal ministry meeting about two weeks ago.
“The issue will be brought up for further study and consideration in the planned meeting with Naccol,” he said. – The Vibes, March 1, 2024
