Hotel rate hikes unjustified by SST revision says MoF
The ministry confirmed that the updated tax structure, effective July 1, does not alter service tax rates for hotel stays or food and beverages served on premises.
The MoF acknowledged that while the SST expansion now includes commercial property rentals and sales tax on select premium food items, these changes should not lead to the 10 to 15 per cent cost surge cited by some hotel operators.
'The indirect effects of SST adjustments are insufficient to warrant such steep price hikes,' the ministry stated in response to industry concerns.
Hotel associations had earlier warned of impending rate increases, attributing them to the revised tax framework.
However, the MoF cautioned that unjustified price adjustments would be scrutinised. 'If hotels raise rates by 15 per cent citing SST, the Ministry of Domestic Trade and Cost of Living (KPDN) will assess whether profiteering is involved,' it added.
The government emphasised its commitment to preventing unreasonable price surges, ensuring consumers are not burdened by disproportionate cost escalations.
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