Taxing customers in Malaysian coffee shops

The Malaysian state of Sarawak, one of two on the island of Borneo, has recently adopted a new Goods and Service Tax, which has seen the cost of a number of products rise in recent weeks. However media reports suggest that this tax is being used as a front by some rather devious coffee shop owners to, illegally, boost their revenues.

Fortunately though, most proprietors haven’t upped prices of their coffee menus. But the actions of a minority have drawn the ire of high ranking Malaysian officials.

“To those coffee shop owners whose turnover is not more than RM500,000 annually, I want to warn them not to [raise prices] as it is against the law,” said Hii Hung Yii, of the Sarawak Federation of Coffee Shop and Restaurant Merchants’ Association (CSRMA).

If people are caught to be artificially increasing the cost of the their coffees, Hii continued, whilst speaking to The Borneo Post, they run risk of being charged under an Anti-Profiteering Act.

It appears that even the government has got involved, with the tongue-twistingly titled Ministry of Domestic Trade, Co-operative and Consumerism (KPDNKK) making numerous warnings about this particular issue. All of this though, seems to be to no avail.

Under this newly implemented piece of legislation, the six percent levy on goods and services will be clearly labelled on the customer’s receipt, in a similar way that VAT is shown in the United Kingdom.

Some coffee shop owners are saying they have raised prices because of this, when the truth is their turnover exempts them from the tax.

“What has [the Goods and Service Tax] got to do with them?” asked Tong Ing Kok incredulously.

Tong, like Hii, is a regional chairman of the CSRMA, and he continued on his tirade: “What these unscrupulous traders are doing is bad for all of us and [is] tarnishing our image and reputation, especially their own.

“What they are doing will not bring them any good. Customers will complain [and] the KPDNKK officers [will] notice and conduct investigations.”

“At the end, they will be the ones in trouble.”