Earlier in November, the government announced that the Goods and Services Tax (GST) will increase from 7% to 8% on 1 Jan 2023.
With 2023 and Chinese New Year (CNY) just around the corner, we’re about a month away from our reunion meals with the fam.
To avoid paying the increased GST, some diners have already paid for their CNY meals in full, reports Shin Min Daily News.
Since there are only six weeks left before the Year of the Rabbit, many restaurants have launched their CNY set menus for diners to make reservations.
In an interview, the CEO of Dian Xiao Er revealed that some customers have decided to pay in full when reserving the set menus. This will allow them to avoid the upcoming GST hike, in turn, saving costs.
Source: Dian Xiao Er
These diners make up about 70% of all customers who placed their orders. On the other hand, some chose to pay only half the fees upfront as they were afraid of potential changes to their plans.
The chairman and president of Tung Lok Group explained the customers who pay in full this year will only be subjected to the prevailing 7% GST.
This approach is a “mutual agreement” between diners and businesses, he remarked.
He also observed that most customers who paid upfront do not reserve only one table, but plan to host banquets. This includes corporate companies as well.
From their experiences from previous years, some customers may book as many as seven or eight tables. Hence a 1% increase in GST can easily add up to a substantial sum.
However, some catering companies were of the opinion that customers should pay based on the increased prices next year, especially due to increasing operational costs and the price of raw ingredients, which typically rises during the festive period.
They also stated that even if a customer places an order in advance, they would calculate it based on next year’s price, which takes into account 8% GST.
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Featured image adapted from Putien.
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