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PETALING JAYA: The expanded sales and service tax (SST) is piling pressure on retail food and beverage (F&B) operators, with industry groups cautioning that higher costs could render many outlets unprofitable and may even force some to shut down.
The new tax regime, which came into effect on July 1, entails an 8% service tax on commercial property leasing and rental services, alongside a new 6% SST on previously exempt construction work services.
This means F&B retail operators now face the prospect of higher rental bills and increased fit-out expenses, further straining already thin margins.
Malaysia Retail Chain Association (MRCA) vice-president and chief of F&B division Valerie Choo said rental already represents a significant portion – often up to 20% to 30% – of monthly overheads for operators, especially in shopping malls and prime commercial areas.
“To give a rough example, an F&B outlet paying RM50,000 in monthly rent would now incur an additional RM4,000 in SST (at 8%).
“For a chain operating 10 outlets, that is an extra RM40,000 per month – or nearly half a million ringgit annually – just in rental-related SST alone.
“Renovations or refurbishment works, which can range from RM100,000 to RM800,000 per outlet, now…