Thoughts on the GST as a regressive tax

What is Singapore actual GST system? Is the present 7% tax a true percentage of the actual taxes that consumers pay? Or are their hidden tax percentages that are embedded with the GST system whereby the actual tax imposed is much higher?

Let’s look at the following scenario:

1) A smartwatch manufacturer is GST-registered. It sells a $100 smartwatch to a distributor and collects $7 in GST.

2) The distributor is not GST-registered but nonetheless has to pay 7% GST to the manufacturer. Since it is not GST registered, it cannot claim any GST input tax from IRAS and takes the effective price of the Smartwatch to be $107. It sells the watch with a 20% markup to retailers at a price of $130 .

3) The retailer is GST-registered. However, it cannot claim any GST input taxes from IRAS because the distributor is not GST-registered. Nonetheless when it sells the goods to end-consumers at $169 (with a 30% markup), a 7% GST of $11.83 must be added to the price of goods sold.

4) The consumer pays $180 for his smartwatch. The total GST included in this supply chain is effectively $18.83 for a product that retails for $169.

Hence, is the GST an equitable tax system? Who are the biggest contributor to GST?

How can one examine the national budget to find out if GST collections had been put to use in accordance to what the PAP government says it will be used for in helping the poor and senior citizens. Is there any method that can measure the desire results of proper fund allocation for every financial quarter? Does the government provide such interim reports to track results versus actual expenditure.

Does GST increase or decrease business operating cost? One virtue of being or wanting to be a Smart Nation is to increase efficiency, effectiveness, wastage reductions, productive use of factors of production to reduce operating cost. Does GST achieved such objectives of optimising use of resources at less cost to increase standard of living?

Can anyone offer a detailed analysis and bring forward such relevancy and worth of GST for Singaporean and Singapore?

 

Singapore Patriot

 

 

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18 Responses to “Thoughts on the GST as a regressive tax”

  • Art of GST:

    Simple analogy. Employers paid a lower salary to their maids because of the levy. The levy money goes to who?

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  • Sinkie:

    The impending hike in GST from 7 percentage points to 9 percentage points represents a whopping 28.57% increase in GST revenue to be collected.

    Think F35s, Guam, megaport, airport terminal, infrastructure for 10 million, etc rather than pecuniary assistance for aged, young startup families . . .

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  • NotMyProblem:

    GST not only increase the cost of operation and living, it also taxes on those without any income. Babies, kids, students and retirees are taxed too.

    End users and consumers are the main contributors to GST. Businesses are the least worry about GST.

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  • Yoda:

    Curious that nobody protested the carbon tax when it was announced.

    Do people realize that at $5/- per ton tax on CO2 is not a laughing matter?
    We emit about 50 metric tons of CO2 per year.
    This works out to $250/- a year. Who will eventually pay for this?
    No prize for guessing it right!

    Apart from the debate on CO2 being the cause of global warming(notice they have changed it to “climate change”), Singapore’s share of CO2 emission world wide is 0.15%. Even if we achieve zero emission(which is the idea of this carbon tax), it will not make one jot of difference to the climate!

    Secondly, the concentration of CO2 in the atmosphere is about 408 parts per million. Which is 0.0004%, and humans are responsible for 3.75% of this amount and nature for the rest of the 96.25%!

    So why are ”we” blaming humans for the sham global warming doom?

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  • $300,000.00 Per Day:

    GST is taxing the Poor, while the rich literally escape with lower income tax as a result.

    “$$$ Billions” of tax-payers Dollars have been given to Foreign Students on Bursaries while a primary school young child, Singapore Citizen was denied her original PSLE result slip just because her parents owe $156.

    Deny 2/3, otherwise this country will be flooding with 10M, displacing own children future and logically will be deprived because of dilution. We need to take serious action to tell them to stop it.

    Under the PAPi, literally no more loves, no more lives, have to steal lunch boxes, become gojek or hawkers and good paying jobs goes to FTs.

    How much are you paying to the GST? [based on 80% spent]

    Take Home Pay Last 5 Years @ 7% Next 5 Years @ 9% Total Loss $
    $1000—————-$4095—————$5265—————$9360
    $1500—————-$6142.5————-$7897.5————$14040
    $2000—————-$8190————–$10530————–$18720
    $2500—————-$10237.5———–$13162.5————$23400
    $3000—————-$12285————-$15795————–$28080
    $4000—————-$16380————-$21060————–$37440
    $5000—————-$20475————-$26325————–$46800
    $6000—————-$24570————-$31590————–$56160
    $7000—————-$28665————-$36855————–$65520
    $8000—————-$32760————-$42120————–$74880

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  • patriot of TUMASIK:

    Why are called Lies and not Lee in Indonesia?…lying is their TRADE…and the Trade figures with Indonesia were all Lies when the man who ConYou was in charge better KNOWN as Lie Con You!!!

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  • Singapore Fooled Again n Again:

    It is a regressive tax. The individual and firms who are non GST registered have to absorb these GST amount. Those companies that have to be GST registered and those that volunteer (at a cost) to be GST registered will end up not paying any GST as they can claim back the GST paid.

    So it is usually the smaller people and smaller firms that are forced to pay GST, and end consumers and users of services

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  • Thinkforothers:

    I just have two words GREED AND SELFISHNESS

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  • Dragged down by 70%:

    Although the 70% support anything the pap do, including get hike, the 30% is also right that the gst is regressive on the poor.

    So do not be fooled by the 70% selfish people.

    They need to suffer to get taught a lesson.

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  • pap fixhere fixthere for ffff?:

    best option is to buy in JB. everything cheap. also no need to participate in pap S$m GST scheme.

    a little inconvenient. but anything that does not help pap is a very good thing to do.

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  • A $ is a $:

    “How can one examine the national budget to find out if GST collections had been put to use in accordance to what the PAP government says it will be used for in helping the poor and senior citizens.”

    The gov has one big super pocket where all money is mixed without tracking where each dollar is from. They don’t have separate accounts that this dollar is from GST and this dollar is from CPF. All mixed, or “commingled” as they say.

    This allows them to anyhow claim that GST is used for whatever purposes without any real tracking.

    For decades, they can’t decide where our CPF money goes to. Finally, pushed to the wall by Roy, they conveniently claim that CPF money goes to GIC. This is just convenient accounting. For decades, ministers have said CPF goes to infrastructure spending, CPF is commingled, CPF is not here, not there, etc.

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  • Yoda:

    Yoda:
    Curious that nobody protested the carbon tax when it was announced.

    This works out to $250/- a year. Sorry. Should be $250 million!

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  • Insatiable Greed no use for us:

    Man, this is complicated. If it’s the way things are now that’s bad shit!
    Already turned us into a casino den and the freaking economy runs on pseudo 1st world wages, cost of living is super-inflated top of the world…!!! But the Pappyguys paycheck also top of the world sial?

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  • Harder Truths:

    Another tax for you to pay. I am waiting for the air tax most likely next year.

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  • many brochures, T-shirts,:

    //Do people realize that at $5/- per ton tax on CO2 is not a laughing matter?//

    it is just another form of rent-seeking in the name of being environmental friendly lar ? most of the advanced countries with industrial are hypocrite lar ? chasing for gdp means chasing for people to consume (& production which directly or indirectly create CO2) and resulting in plenty of waste lar ? meeting after meeting either at international and regional level, so is emission of CO2 increasing, decreasing or maintaining ?

    look at sinkie land itself, so many big space of green has been slaughtered for buildings after buildings; and then white idiots pretend to have programmes and seminars tokking on being environmental friendly to show that they doing somethings (sometimes pretentiously planting one tree here and there ?) ?

    imagine in some road shows (some to promote environmental friendly behaviors) in sinkie land where they print out so many brochures, T-shirts, small cheap ‘throwaway’ or ‘useless’ gifts, are all these environmental friendly contributing to climax and environment ?

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  • TruBlu:

    G$T is indeed regre$$ive especially when so many retirees n jobless sgs have to fork out their meagre savings just to pay for basics including MEDICAL BILL$$$ that can run into tens or hundreds of thousands for diseases like cancer and heart ailments.

    It is sad to see aliens stealing our gainful jobs and competing with ordinary sgs for housing(which aliens rent out) and limited medical resources.
    Aliens get gst refund for medical but locals dont.

    Time for GST REFORM to cater to jobless n retirees.

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  • Art of GST:

    NotMyProblem:
    GST not only increase the cost of operation and living, it also taxes on those without any income. Babies, kids, students and retirees are taxed too.

    End users and consumers are the main contributors to GST. Businesses are the least worry about GST.

    If I am not wrong HK don’t have GST. Their setback is public housing.
    But Singapore has public housing. Expensive and depreciating. lol

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  • PAP CLOSE DOWN:

    Why should we pay tax? For the govt to give jobs and scholarships to foreigners?

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