Govt has nothing to do with service charge, says Chua

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KUALA LUMPUR: The government has nothing to do with the service charge, says Deputy Finance Minister, Datuk Chua Tee Yong.

He said the the service charge was levied by businesses and was not a tax imposed by the government.

Hence the government does not collect any revenue from the service charge after the implementation of the Goods and Services Tax (GST) on April 1 this year.

Citing restaurant businesses, Chua said, they were imposing service charge and service tax at the moment.

“The service tax will be replaced by the GST and the service charge will still be there,” he told reporters after the roundtable discussions on Malaysia’s GST with Ministry of Finance and the Royal Malaysian Customs here yesterday.

“Businesses are the ones which determined the rate,” he said.

Chua was asked to clarify the confusion over service charge which was initially thought to be a form of tax imposed by the government.

He also gave an assurance that no action would be taken against the companies for making unintentional errors during the first two years of the implementation of the GST.

“They include making mistakes on software and calculation during the grace period.

“The Customs Department will not impose fines initially. The department’s advisory audit is aimed at giving advice and guidance,” he said.

The advisory audit, he said, would be undertaken during the first two years of the implementation of the GST. — Bernama