URA, are restaurant meals and drinks subject to VAT?

Aug 04, 2008

EDITOR—On Thursday evening, with friends I took some drinks in a city centre outdoor restaurant attached to a major hotel. Among four people we had six bottles of beer and the bill reached sh26,000.

EDITOR—On Thursday evening, with friends I took some drinks in a city centre outdoor restaurant attached to a major hotel. Among four people we had six bottles of beer and the bill reached sh26,000.

Simple calculation tells us that this is sh4,300 for a beer which is fairly high and will certainly discourage us from ever going there again. However, what was curious was how this bill was made up: sh21,000 was for the beers, then sh3,969 for VAT and then a service charge of 5% which was sh1050. I asked the waitress if they receive a share of the service charge and they said, no, they never do; it is retained by management.

I believe that I should be allowed to choose to reward the server, and I could see no other reason for the service charge so I asked to see the manager. He confirmed that ‘management’ (apparently someone above him, though he was called Manager) had given the order for that.

If we start breaking the charges down like that, will we soon have an electricity charge, a chair charge, a tablecloth charge and have to pay to go to the toilet? If that is to be the case then let the bill also clearly show how much the establishment paid to buy the beer (wholesale, I guess) and separately show the profit on the bill, which would in this case show a profit of over sh2000 on each bottle!

When I asked the manager if he would contact the managers above him or behind him about my complaint he assured me he would but made no effort at all to ask for my contact details. When I pointed this out he then gave me his card (so I could follow up at my expense, and with the same person).

Could URA clarify on this? Are restaurant meals and drinks subject to VAT?

Barry Sesnan
bsesnan@gmail.com

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