Singaporeans compare prices to get the best value for money for their purchases, and to better manage the cost of living. According to the 2023 Household Expenditure Survey, about 16% of Singaporeans’ monthly expenditure is on Food & Beverage Services. Unfortunately, it is more complicated to compare prices when eating out than when making other retail purchases.
While some F&B outlets display all-inclusive prices, others do not include service charge and GST in the menu price. This inconsistency can cause frustration when the customer sees a final bill which is almost 20% higher than the menu price, and it also makes it harder for customers to compare prices across different F&B operators. Tourism is a key driver of our services industry, and I have in the past, often heard feedback from my foreign friends about how they are shocked by the final prices of their F&B purchases and their taxi rides, compared to the prices they were initially expecting. In the era of ride-hailing apps, the shock of seeing a myriad of additional charges added to the flag-down fare is now much less likely. But when it comes to F&B establishments, this sticker shock remains.
Currently, IRAS grants hotels and F&B outlets an “administrative concession” which allows them to display prices excluding GST if they also impose a service charge. This differs from other retail sectors, where price displays must include GST. IRAS's rationale for this concession was to help restaurants manage operational challenges when waiving service charges for takeaway orders.
I would like to ask the Minister when this concession was last reviewed and whether it is still relevant today. Given the prevalence of electronic menus, it is very straightforward for restaurants to display both dine-in and take-away prices. Alternatively, if they use paper menus, they could simply give a 10% discount for take-away orders instead of adding 10% for dine-in orders.
Some restaurants do display all-inclusive prices but many may be reluctant to do so for fear that they would be seen as being more expensive than their competitors. In the interest of ensuring a level playing field between F&B operators and improving consumers’ dining experience by having greater price transparency, I urge IRAS to review this concession and to require the display of all-inclusive prices as I believe the overall real benefits to the public outweigh any perceived costs to businesses.
