Malaysia’s Controversial Service Charge

Malaysia’s Controversial Service Charge: "Though it’s encouraging that the Malaysian government has done right by the people, and beyond question that consumers will benefit from this new regulation, it seems much of it was prompted by confusion about the service charge once the GST programme was implemented. Comments I’ve read on various stories about the service charge seem to bear this out – many Malaysians don’t understand that the service charge doesn’t have anything whatsoever to do with tax, nor did it ever. Many customers had apparently refused to pay the service charge once GST was imposed, which is baffling since there had always been a government tax levied anyway (at least in restaurants that served alcohol or had a certain level of annual sales). But GST, which is imposed on all restaurants now, seemed to be the catalyst here, and the lack of understanding about service charges prompted renewed discussion, and in my opinion, the government made the right call. It protects consumers, and it protects restaurant and hotel service staff."



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