GST: Rename restaurant, hotel service charges to avoid confusion

The 10 percent sales and service charge imposed by restaurants and hotels should be renamed to avoid confusion with the Goods and Services Tax (GST), says Deputy Finance Minister Datuk Ahmad Maslan.

"We want to propose that the service charge be renamed restaurant or hotel charge because it's not the government but the hotel or restaurant that's taking the money," he told reporters at the Dewan Jubli Intan Sultan Ibrahim here Tuesday.

Ahmad, who is also Pontian MP, earlier spent about two hours explaining to local residents the GST, Budget 2015 and other related issues.

"If the service is not good, consumers need not pay. They have to pay the six percent GST, but for the service charge (restaurant or hotel) of 10 percent, they have a right not to pay," he said, adding the service charge is better treated as a tip to the workers.

Ahmad also reiterated that the GST would reduce prices of essential items.

"When tabling Budeget 2015, Prime Minister Datuk Seri Najib Razak announced that prices of 56 percent of 900 goods would go down.

"We have also come up with shoppers guide books to help the public compare prices of basic necessities before and after the GST implementation," he said, pointing out that only non-essential items would cost more with the GST.