SANGAM

Bistros to get costlier

SANGAM PRASAIN
KATHMANDU, AUG 02 -
The Restaurant and Bar Association of Nepal (REBAN) is set to increase the price of meals served by its member establishments by 7-8 percent in line with inflation and the raised salaries of their employees.

The revised prices will come into effect from August-end.

Currently, all the eateries under REBAN are charging 24.3 percent tax (including 10 percent service charge and 13 percent VAT). However, with the revised prices, consumers will have to pay around 30-31 percent extra.

“We are compelled to increase prices as there is only a marginal 7-8 percent profit for restaurants and bars,” said Tejendra N. Shrestha, president of REBAN and proprietor of Yin Yang Restaurant and Bar.

Restaurant owners and labour unions had an understanding to review their pay and perks every three years. However, with the increased inflation, restaurant owners have been compelled to hike the pay of the employees every year, which was also the reason to increase the prices on their menus, he said.

According to him, restaurants serving local consumers had already revised their prices. However, the tourist standard restaurants are still waiting for the tourist season to increase the price of their food and beverages.

“All the restaurants and hotels should make 20-30 percent profit as per the principle of the hospitality industry to pay taxes and run the business. However, business in this sector was not going as expected due to labour related issues, load-shedding and inflation that has increased the operating cost,” he added.

Nepal Rastra Bank’s data of the first 11 months of the current fiscal year said that the price index of food and beverages group increased by 11.3 percent. The data said that restaurant meal price indices increased in the review period by 18.8 percent compared to 16.5 percent in the same period last year.

According to a source, the government’s recent move to make it mandatory for all eateries having an annual transaction of Rs. 2 million or more to come under the VAT net has also prompted restaurants to increase the menu price.

There are around 1,600 restaurants in the Kathmandu Valley, however; only 300-350 restaurants are in the tax net.

“The high restaurant price has affected the consumers ultimately,” Shrestha said, adding that the government should remove the Rs. 2 million threshold in the VAT system and increase the tax limit to bring all the restaurants into the tax net.

The government should encourage taxpayers by providing subsidies to those paying big tax amounts, he said.