KUALA LUMPUR: Several restaurant owners have voiced concern that the two per cent hike in the sales and services tax (SST) will affect business which is already hit by rising costs and lower sales.
The restauratuers, who declined to be named, said they received a notice from a popular delivery platform about the impending SST hike.
Being food businesses, the restaurant owners said they did not expect to be directly affected by the increase in the SST from six per cent to eight per cent, as the food and transport sectors were exempt from the hike.
An email from the food delivery platform to its merchants sighted by the New Straits Times indicated that the service for the use of the platform was however subject to the SST increase.
It is understood that for this particular food delivery platform, SST is imposed on the commissions obtained for each sale.
Currently restaurants pay a six per cent SST on the commissions.
The NST has reached out to the delivery platform and the Customs Department for comment.
"The announcement (from the food delivery platform) took us by surprise," said one restaurant owner who sells Malaysian food in Kuala Lumpur.
"We cannot change our pricing as we are already seeing a downturn in business in the last quarter of 2023."
The restauratuer added that he hopes the government will reconsider the imposition of the tax hike on food delivery platforms.
The owner of a Korean restaurant chain, meanwhile, said the two per cent hike comes at a time when costs were higher amid the weakening ringgit.
"Even with increased costs, we have tried not to increase prices. We don't see how we can raise our price further, as people will not be able to afford it," he said.
He, too, urged the government to exclude food delivery platforms from the SST hike.
Meanwhile, a restaurant owner in Jalan Klang Lama said he would not be surprised if merchants on food delivery platforms increased prices.
"Any increase in costs will put pressure on small businesses. Post-pandemic, food deliveries, at least for my restaurant, have contributed significantly to sales," he said.
He added that business owners have already had to struggle with rising costs in the past year and business has also been sluggish.
The owner of the stand-alone restaurant said he has already frozen hiring of new workers.
"For now we won't raise prices... we'll see how the first month goes."
