The Ministry of Finance (MOF) has stated that recent changes to the Sales and Service Tax (SST) do not provide grounds for hotels to raise room rates, as suggested by some hotel associations.
No Changes to Tax on Hotel Stays or Dining
According to the ministry, the SST revisions effective July 1 do not include any adjustments to the service tax applied to hotel accommodation or food and beverages (F&B) served at hotels. Guests staying at hotels or dining at hotel restaurants should not expect additional charges directly related to the new SST structure.
Indirect Impacts on Hotels Are Limited
MOF explained that the revised SST primarily affects certain areas outside of core hotel services. These include the expansion of the service tax to rental of commercial properties and sales tax on selected food items, such as premium seafood and imported fruits.
While these changes could indirectly increase some operating costs for hotels, the MOF emphasized that the overall impact should be minimal. The ministry does not anticipate these factors leading to significant cost increases for hotels.
Government Warns Against Unjustified Price Increases
The ministry responded to claims by some hotel representatives who suggested they might raise room rates by 10% to 15% following the SST revisions. MOF stressed that such substantial price hikes cannot be justified based on the new tax measures.
If hotels proceed with rate increases under the pretext of the SST changes, the government will intervene. The Ministry of Domestic Trade and Cost of Living (KPDN) will investigate any unreasonable price adjustments to ensure there is no profiteering at the expense of consumers.
Commitment to Fair Pricing for Consumers
The government remains committed to protecting consumers from unnecessary price increases. Hotels are urged to maintain fair pricing practices and avoid using the SST revisions as a reason to raise rates without clear justification.
MOF will continue to monitor the situation closely to ensure that both businesses and consumers are treated fairly under the updated tax structure.
(Source: Bernama)
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