Which Restaurant Eligible to Charge 5% Government Tax?

Do you know since 1st July 2008 onwards, all food restaurants other than hotels exceeding RM3million per year will be charged 5% government tax? I was in doubt whether certain restaurants like Old Town, Mcdonald’s and KFC can earn RM250,000/month for each outlet or not.

5% government tax

Sometimes, we as a consumer need to think whether the restaurant has the eligibility to charge us or not. If let say they are not eligible to charge us and still collecting 5% government tax from us then for sure it will become illegal !!!

Basically, a company could only collect 5% government tax from consumer if they have the license to do so, meaning they have to apply for it and obtain approval before charging it to customer as they are merely collecting on behalf of the Inland Revenue. And the money is not kept by them but need to be remitted to Custom at the required time.

I got these information through the email replied by the Custom:

5% cukai kerajaan

All of this is governed under Sales Tax Act 1972 and Service Tax Act 1975. If you’re a chargeable person who running business and have reach the “threshold”, then you will be charged. The threshold is your turnover for a financial year has exceeded the threshold (RM3million) and it’s different depending on the type of services and goods that you sell. So basically those who do charge 5% service tax are those who had exceeded the threshold.

Be a smart consumer, you may report any related complaint at cd@customs.gov.my or kastam@customs.gov.my. If you need further information, you can try visit http://www.customs.gov.my

3 thoughts on “Which Restaurant Eligible to Charge 5% Government Tax?”

  1. What the funny thing. That business (kfc, mc’d etc) has get threshold 3 juta and still charge public to pay the service tax 5% that for a year can rombust at 3 juta also. That i’ve live in hell or not…????

    And also…5% money goes to…????

  2. Restaurants which do not meet the threshold still can apply for service tax license voluntarily. It is to avoid miscalculating the revolving 12 months basis specified and also the subsequent penalty. Example, if a restaurant meets the threshold in June but only realizes that on August, then the restaurant would have to pay the service tax from June and July itself rather than charging the customers because the customers have gone..so voluntary application is practiced by some of the taxable service providers..and also service providers licensed would have to show their licenses in a safe place where they can be easily seen like at the cashier.

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