GST: Operators at crossroads of whether to absorb tax or pass it on to customers

MIRI: Many business owners here, particularly those running dining and entertainment outlets, are in a dilemma of whether to absorb the six per cent Goods and Services Tax (GST) from their billings, or to pass it on to customers come its implementation this April 1.

A dining and entertainment outlet operator, who wanted to be known only as Kelvin, believed that he shared similar sentiment with his fellow businessmen on GST.

Many of us are not sure of the mechanism and system to be applied with the implementation (of GST). Some may have obtained information from briefings by (Customs) officers as well as from the Internet, but it is still sketchy for many.

Of course, to increase prices of food and beverages would not bode well with the customers, given the current economic climate. Customers would feel and see the increase as another burden on top of everything else, said Kelvin, who runs his premises at Miri Waterfront.

He understood that with the implementation of GST, the 10-per cent government tax would be abolished.

Adding on, he believed that due to stiff competition, some operators might as well absorb the GST in their price list rather than opting for price hikes.

Moreover, the incorporation of GST into operations could incur more costs, he said.

There will be changes in their bookkeeping software, on top of having to reprint new menus among other things, he pointed out, adding he was aware that officials from the Royal Malaysian Department would be inspecting premises across the city to ensure that the owners would adhere to GST system and apply it correctly into their operations.

It is anticipated that the new tax would result in a highly competitive food and beverage industry.