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14/04/2015

30 YEARS OF RESTAURANT/EATERY SERVICE CHARGE FRAUD & GST EXPLAINED! OUTLAW SERVICE CHARGE!

by custom and exercise, donplaypuks® intrepid correspondent for robbing the people affairs


It's incredible that Service Charge has been around some 30 years and yet people are confused over who charges it and who actually gets to keep the money. How come all these years everyone who ate at restaurants and even some popular coffee shops keeps scratching their heads over the +10% Service Charge and  +6% Service/Government Tax? 

GST (GOODS & SERVICES TAX, FORMERLY SERVICE OR GOVERNMENT/SALES TAX) IS CHARGED BY YOUR (NOT MY) GOVERMENT. THE GOVERNMENT COLLECTS AND SPENDS THIS MONEY, MOSTLY WASTEFULLY

Your glorious Grossmeldajib, the prime minister who wears the pants, and her husband who wears the skirts and panties, generously increased Service Tax from 5% to 6 % a couple of years ago, without giving any logical reason for it. So, the 6% GST (ex-Service Tax) is charged by your (not my) Government. 

The Customs & Excise Department collects it to blow it, I suppose, on new jets costing RM 450 million, free trips for cronies to Kazakhstan for wedding engagements, 1 MDB etc., all extremely value-for-money spending by those who are increasingly proving to be totally unaccountable to the Rakyat who voted them into office and vested power in them to rule the country justly.

SERVICE CHARGE IS LEVIED BY RESTAURANT/ EATERY OWNERS

Put simply, the +10% Service Charge is levied on unsuspecting customers by the restaurant and NOT THE GOVERNMENT. Legally, the restaurant gets to keep the money. The original logic for charging SC was that many, stressed out trying to figure out how much they should tip waiters, committed suicide or hara kiri, causing a lot of mess on the premises. So, restaurants introduced a fixed 10% Service Charge and added it to the bill to save unnecessary deaths. NO MORE TIPPING!

The restaurant owner is supposed to then divvy up the Service Charge collected and pay it to the waiters as part of their monthly remuneration incentive. My experience in auditing suggests that many restaurant owners take the whole whack for themselves, or in some cases, sapu 50% for themselves, leaving the balance for the waiters as their share. A few honest owners, pass 100% of the Service Charge to the waiters.

Let me explain this with a simple illustration which will show not only the Service Charge, but also, the GST con:

Restaurant food charge -    RM100.00
Service Charge @ 10% - RM  10.00
Sub-total -                           RM110.00

GST 110 @ 6%           -     RM   6.60

Total Bill -                         RM116.60

THE SERVICE CHARGE CON EXPLAINED:

1. When costing in the charge for a restaurant meal, the owner has already included ALL overheads (direct food cost, cooks etc, administration and sales) including the salary, Epf/Socso, OT, holiday pay, increment, health, travel, incentives, etc. of ALL staff, not just waiters, as well as contingencies and recovery of capital expenditure. His profit, would be reflected in the mark up e.g. if the cost is RM1 per meal, then he would charge RM3 for a meal (300% mark up), giving him a gross profit 67%. Do not forget that all businesses also claim back capital expenditure, except for renovations, from the government. So, how is the extra 10% Service Charge justifiable? What do you get for it if the waiter is already paid a salary to do his job? Good behaviour and service from the waiters? But, that's already included and guaranteed in the cost of the meal. Ambiance? That will be claimed from the Government by deduction from profits as capital expenditure allowance.

2. If the service is lousy, can you refuse to pay? Legally, no. You have to take the restaurant owner to court, and really, in practise, who has the time to do this? Laws should be in place to protect primarily the consumer, not just the service provider, yet we have this legally enforced 'pay first, dispute later' law!

3. A well-know newspaper columnist has argued that consumers have a choice. If you don't want to pay Service Charge, you can go to a eatery that does not charge it. But really, is this fair to the consumer? Can you hold a wedding dinner in a coffee shop or road-side stall to avoid paying Service Charge? Why should consumers have to pay, especially since the capital expenditure of many eateries are subsidised by the Taxpayer in the form of capital allowances and tax breaks?

In my opinion, Service Charge should be outlawed. In USA for example, you are expected to leave a tip of 10%-15% of food bill as tips; there is no service charge. Again, to me, this is unacceptable. Tipping and Service Charge should be optional. Let the consumer decide how much EXTRA, if any, the service is worth and tip accordingly. And if waiters are being screwed by restaurant owners with low wages, that's where the law should step in and legislate that they be paid a livable, minimum wage. Leaving everything loaded in favour of business operators, results mostly in the PAYING consumer being taken for a ride.

THE GST CON EXPLAINED

The basic rules of taxation have always been straightforward:

1. No taxation without representation. If a referendum were to be held tomorrow on the single issue of Yes or No GST, it's guaranteed that GST would be thrown out. Did the Grossmeldajibs and BUMNO/SCUMNO/Barang Naik dare ask the Rakyat for a mandate by including it in their General Election 2013 manifesto? Of course, they didn't have the balls to do so. So, we have been screwed once again by your (not my, I did not vote for her, you did) glorious Grossmeldajib, the prime minister who wears the pants, and her husband who wears the skirts and panties.

2. Simplicity. Here again the Grossmeldajibs have failed because, despite several years in the planning, there is total confusion over what is exempt and what is not, and what is taxable and what is not. Is it not incredible that the Transformers in the Grossmeldajibs department with its RM17 billion budget licence to spend without disclosure, transparency or accountability, have NOT come out with a comprehensive GST reference booklet?

3. Fairness. How is it fair? By what logic is Service Tax or GST fair especially when it is the middle and low income citizens who will bear the brunt of it? Did they cut income tax? What has the Government done to improve the Rakyat's lot to justify asking the Rakyat to pay this extra tax on top of Income Tax and Real Property Gains Tax? Simple question: Are potato chips crispier or do they taste better the next day when GST is charged, its flavour improved by a gaji buta Government?

Looking at the example above, you will notice that GST is charged on the restaurant's Service Charge as well. In simple words, you pay 6% GST on the RM100 food cost AS WELL AS 6% on the restaurant's Service Charge!! Your GST bill is 6% x RM100 = RM6 + 6% on Service Charge of RM10 = 0.60 cents, TOTAL RM6.60!!!! 

WTF should the government tax something it contributed nothing to improve? Remember, all this money from GST is going, not to improve your standard of living, but to service interest arising from the RM550 billion National Debt the Grossmeldajibs have run up. Under the Grossmeldajibs, the national debt has more than doubled!! The annual cost of servicing debt alone is about RM25-30 billion. Now you know why GST was introduced - to cover up the total mismanagement of the economy by the Grossmeldajibs!! 

GOVERNMENT BORROWING RM BILLIONS AGAIN

You will have read today that the Government is raising another RM7 billion in bond debt to pay for the loss of money arising from the 15% depreciation in ringgit value this year. The ringgit is the worst-performing currency in Asia this year - 3.70 vs US$ and 2.67 vs Singapore $. Why are we fire-fighting now instead of having properly planned ahead against monetary erosion. You still think that our central bank has been managed well to deserve international accolades and awards? When prime ministers and central bank governors are too long in office, complacency and sloth sets in. That's a natural law.

We need changes here and now and if you vote BUMNO/SCUMNO/Barang Naik again next time, be prepared to stand in rice, bread, sugar, salt and meat queues come 2018,  BRIMming with hunger and fuming in anger.

Get off your backs and support the move to rid this nation, once not so long ago considered a tropical paradise, of the Grossmeldajibs and their entire administration of low IQ incompetents, rogues, economic saboteurs, plunderers and looters - a Government of Thieves and traitors! 

Donplaypuks® with indiscriminate taxes, get rid of the Grossmeldajibs, man!

1 comment:

Anonymous said...

It is not enough just to get rid of these "plunderers and looters", if they get to keep their loot after being gotten rid of. We should not allow there to be billionaire ex-looters in our midst. We should also get back the loot with interest and return it to the country.