The cancellation of the service charge has hit the pockets of 400,000 Kyrgyz citizens

The Horeca Club Association, which brings together representatives of the restaurant and hotel business in Kyrgyzstan, has announced the possible negative consequences for the industry if the 15% service charge is cancelled. The corresponding appeal was published against the backdrop of discussions on changes to pricing rules in the catering sector.

The association notes that the 15% is not additional income for businesses, but is used to pay salaries to employees. According to Horeca Club estimates, the HoReCa sector employs about 400,000 people, which is about one-sixth of the country's working-age population.

According to the association, the total cost of operating catering establishments ranges from 83% to 89% of revenue. The largest share of costs is made up of food and raw materials — 38–40%, payroll and related tax payments — about 15%, rent — 7–8%, and tax liabilities — 4.6%. The rest of the expenses are for utilities, marketing, equipment maintenance, bank commissions, and logistics.

The Horeca Club emphasises that reducing the service charge without alternative solutions will either lead to higher menu prices or lower staff incomes and job cuts. The association also pointed to the risk of increased labour migration.

The association called on the Cabinet of Ministers to engage in dialogue with industry representatives and consider recognising the hospitality industry as a strategic sector of the economy.