Mediterranean Observer
The Malta Hotels and Restaurants Association (MHRA) believes that whether a restaurant applies a service charge, a cover charge, or neither should remain a commercial decision for the entrepreneur.
Different establishments operate different business models, and that flexibility should be respected. What must be guaranteed is full transparency, with customers clearly informed of any applicable charge before placing an order and in line with consumer protection requirements.
MHRA also stresses that service charges and cover charges are not the same thing and should not be confused.
At the same time, MHRA is calling on Government to introduce a clear framework whereby genuine tips and qualifying service-related payments distributed to hospitality employees are tax-free.
Where a charge is specifically represented as being for employees, it should be distributed fairly and transparently to those employees and remain separate from the employer’s responsibility to provide proper wages and employment conditions.
MHRA is urging Government to use the forthcoming Budget process to introduce a simple framework based on three principles: freedom for businesses to determine their commercial model, full transparency for consumers, and tax-free rewards for employees who deliver excellent service.
