Service tax outmoded with eateries serving up tech

I agree with Ms Neo Seok Kian that the authorities need to relook the 10 per cent service tax at eateries (Good time to relook service tax at eateries; Forum Online, Dec 12).

This service tax was introduced to encourage more people to join the food and beverage sector due to a shortage of manpower.

Salaries were low at the time and many waiters depended on tips, which were inconsistent and dependent on the expectations of paying customers, to supplement their monthly income.

Hence, the authorities stepped in to help the industry by imposing a standard 10 per cent service tax for the food and beverage sector.

The tax collected was supposed to be distributed among the waiters but, over time, it started going straight into the business rather than to the service staff.

Presently, automation in the food and beverage industry seems to be increasing.

We can see the rapid transformation in this sector when we patronise eateries.

Customers now place orders through tablets placed on the table and food will be served, requiring no interaction with service staff.

As the norm has changed, the authorities need to consider the possibility of eliminating the outdated 10 per cent service tax.

Lim Tong Wah

A version of this article appeared in the print edition of The Straits Times on December 21, 2017, with the headline 'Service tax outmoded with eateries serving up tech'. Print Edition | Subscribe