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Difference between GST and sales tax

I dislike GST which is a “bits and pieces” tax. I prefer a sales tax.

What is the difference?

GST is a value added tax. It is levied on every transaction. When a product flows through the supply chain, it is taxed at each stage, but the party is allowed to deduct the GST that has already been paid earlier, so it has to pay only the difference.

There is a lot of accounting work needed to compute the “output GST” and to deduct the “input GST” at each stage. Although large businesses can use computer systems to do the accounting, it still requires work to handle the input of the transactions.

I describe this as the cost of GST accounting. Each business has to employ accounting staff to do the accounting work. It is horrendous.

What about a sales tax?

This takes much less work. The government can decide on the business establishments that need to collect the tax and also the items that need to be taxed.

Usually, the sales tax is collected at the final stage and is not collected at every stage of the supply chain.

For example, the sales tax can be computed at hotels, restaurants and purchase of expensive items like cars, houses and luxury goods. It does not need to be collected for medicines, education fees, health care and purchases from the markets.

A sales tax can be made more targeted at items that the buyers can afford. It does not need to be levied on items that are bought by poor people.

I support a sales tax that is collected at the final stage of the supply chain. I am against a GST that is levied at every stage of the supply chain and that is applied on every item of goods and services.

Do you agree that a sales tax makes more sense and is less costly to administer?

 

Tan Kin Lian

 

 

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11 Responses to “Difference between GST and sales tax”

  • DavidNeo&IreneVanessa:Bastards:

    No tax is good news.

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  • Folksy TKL:

    It seems like a good suggestion. Folksy TKL, how do you like to be a NMP? Get your friends to nominate you. Your common sense will be a match for the scholars! It will be an opportunity for you to win the people over with your exceptional common sense and to get you elected at the next round.

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  • Absolutely ... Mr. Tan:

    And even if they proceed with GST there should be non-taxable items and services – You don’t want to tax the ordinary working man into hardship do you? Take Malaysia as a model for illustration:

    https://www.3ecpa.com.my/goods-and-services-tax-gst/zero-rated-supply-exempted-supply-relief/

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  • MarBowling:

    In the Holee and Noble Name and AIM to HELP the POOR and NEEDY, GST is a COFFIN TAX designed to FATTEN the Coverment’s COFFER, period!

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  • xoxo:

    Still i go to see my doctor, i ,say, pay A SALES TAX is the same as i pay G$T.
    I say lever mine,apply GST but give exceptions or REFUNDS on certain ITEMS like MEDICALS for JOBLESS N SENIOR CITIZENS.

    WHY SHOULD NON-sgs receive the same or better treatments from the govt which is supposed to SERVE SINGAPORE CITIZENS FIRST?
    TAKE THE $100 BILLION LOOT.
    MANY JOBLESS N NEEDY sgs receive only $600 when PER CAPITA IS SUPPOSEDLY $23.5K???!!!

    MANY GAINFULLY EMPLOYED NON-sgs like PRs/FTs get more ,much more, than even the PER CAPITA $23.5K!!!

    THIS IS UNJUST TO CITIZENS NO MATTER HOW HSK TRIES TO EXPLAIN VIA *SAVE JOBS* objective???

    First,THE WELL-PAID DECENT JOBS WERE ALSO STOLEN FROM GOOD sgs and handed over to NON-SGS AND THAT IS ALREADY ANTI-CITIZENS PRACTICE?

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  • No hoots given:

    The gist of it all is, this gov doesnt give a hoot what we want or whats good for the population.
    As long as they make money and lots of it ..express even better.
    Just like importing foreigners here like no tomoro!

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  • Harder Truths:

    “…There is a lot of accounting work needed to compute the “output GST” and to deduct the “input GST” at each stage. Although large businesses can use computer systems to do the accounting, it still requires work to handle the input of the transactions…”

    Companies do not have time or resources to produce such paperwork and are scared that IRAS will come after them if they make a mistake. In theory it can work, but in practice it cannot. There are some exceptions, like labour-hire that cannot afford to ignore this, but for the rest of the goods and services you buy everything is most likely added on.

    It is much easier for the GST to be added at each stage to the final product. That is why we have such high prices for only a 7% GST. Each hidden layer of work done is added to the final cost. The government will say that this is not their fault, and the means exist to overcome this problem. However the reality is ignored by these pappy ‘scholars’ who know only how to pass exams and never worked in the real world.

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  • Reality:

    Reality is those that need it most don’t get support while those that don’t need will get.
    The system is not right but no one bother to do the right thing.
    All want just to follow the rules blindly and play safe.
    No brain no empathy…

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  • INSIDE 200m is not within 200m:

    don’t be a pap cock.

    tax works if it is levied on income.

    for anyone without a job, any tax is squeezing blood out of stone.

    we just cannot understand why 61% sheep does not feel any pain under the pap S$m money faced schemes.

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  • Double Taxation?:

    Income Tax Rates increase with higher income. So they are using GST to lower their (high-income-bracket) Tax rate and then make the poor people pay GST on all their spending. Even when retired spend from their Savings which are already taxed (before GST days). This is double taxation.

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  • 154media:

    singapore income tax is mostly designed to leech the poor and keep the rich happy

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