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Why GST is wasteful and should be abolished

I share this example to explain why I oppose GST strongly.

a. When I sold my office property, I had to collect GST from the buyer and pay GST to IRAS (the tax authority)
b. The buyer does not mind paying the GST, because they can recover it from the IRAS.
c. I have to pay GST on the lawyer fees, and can recover the GST from IRAS

Basically, it is a game of collect GST, pay GST and get GST refund. It is a waste of work. It is unproductive and wasteful. Many people have to spend time to do the wasteful work.

This does not apply only to the occasional transactions, such as the sale of office property.

It applies to all transactions that occur everyday, most of which attract GST. It creates a lot of accounting work to bill GST, collect GST, pay GST to IRAS, get GST refund.

The large companies can computerize the accounting. Even so, they required manpower to identify and sort out the transactions that require GST or are exempt from GST.

Smaller companies have to employ staff to manually manage the GST accounting.

The small companies that are exempt from GST do not get away either. They have to pay GST on their purchases or supplies, and that add to their cost of operations.

Many people ask for essentials, such as food and medicine, to be exempt from GST, to reduce the impact on people with lower income. The government does not like this suggestion as it would complicate the GST accounting further. (Although, I must point out that many countries manage to exempt these essential items).

For the past three decades, I held the view that GST is a very bad tax and is also costly and troublesome to administer. As time goes by, GST becomes worse and more costly.

I hold the view that the government needs to collect sufficient revenue to run the country, to provide public services, to build a credible defense and to build infrastructure.

There are better ways to collect the tax revenue. GST happens to be a very bad way. I held the view, for three decades, that GST should be totally abolished.

 

Tan Kin Lian

 

 

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READER COMMENTS BELOW

29 Responses to “Why GST is wasteful and should be abolished”

  • give some titbits / handouts:

    //There are better ways to collect the tax revenue. GST happens to be a very bad way. I held the view, for three decades, that GST should be totally abolished.//

    aiyoh. should be abolished ??? wait long long ?? already cannot wait to increase to 8% and then 9% liao ??? imagine how much is lost if abolished ?? how to help the poor (or more like also helping the white gang of kaki lang with their high salaries ???) ??? orelse how to divert another 1% or 2% GEE-ASS-TEE from those who can afford to pay on consumption (from rich people who can afford / have the high spending habits to pay for expensive toys or big ticket items or whatnot ??) ???

    https://www.businesstimes.com.sg/singapore/economy-policy/singapores-tax-revenue-surges-224-s607b-low-year-ago-base

    collect GEE-ASS-TEE from everyone (from poor to the filthy rich ??) and then give some titbits / handouts back to the poor so that the latter will forever feel grateful to chenghu lar ??

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  • TKL is right:

    The gov got cheated millions and millions in GST claims. That’s what was caught. What’s undetected could be billions?

    On the other hand, the gov probably pocket loads of GST that people don’t know how to claim.

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  • xoxo:

    G$T like GRC are both lame.
    Both shud be ablolished.Period.

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  • Observer:

    GST has least impact on rich people.

    There is a limit to how much chicken-rice/ or char-kway-teow the rich person can eat.

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  • NotMyProblem:

    I don’t think any consumer can recover GST from IRAS, unless you are a tourist of this country!

    Once the end consumer pays GST for any goods and service it’s a done deal, the government keep it! Only business to business can recover GST.

    GST is a tax for everyone from baby till you die. With or without income! Income tax is on one’s income, whereas GST is tax on spending. Government loves GST because everyone needs to and has to spend.

    Singaporeans can only hope to reduce GST or some goods to be exempted from GST. One way to do it is to vote out the PAP, and there is hope!

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  • Eddie Tan:

    In simple term GST is payment from pre-cradle to grave: similar to pay and pay. All those CDC vouchers, etc are ONE time gain but GST is forever!! Conclusion: GST is not a good tax on Singaporeans at large indeed!

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  • Dr. Chan:

    PAP need to raise GST to help the poor (in reality it is to feed Ho Ching’s gambling habit) lah. How can anyhow abolish one?

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  • Light The Way:

    A clear mandate was given to raise GST.

    For the 61.2%, it’s the cherry on top of the cake.

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  • High Taxes Good for our People:

    I truly hope we should increase the GST to 25%.

    Targeting it to 9% is very mild to curb inflation.

    If it can go up to 30% lagi best.

    This will surely stop unnecessary spendings and demands to bring down high prices and profiteering by greedy hawkers, restaurants and retailers.

    Tech: It is said that Sinkies have a very high threshold for pain, so 25% would not make any difference, for starters, I think 50% would be much more reasonable.

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  • SINGAROAR:

    All corporates can retrieve any monies spent on GST. So GST is targeted at us, the people on the street and the tourists. In most First World states people do not pay GST for groceries and food. The cash registers in supermarkets, malls and eateries will charge GST for only alcohol and tobacco. Here in Singapore, the govt. refuses to tax the wealthy by way of a wealth tax but has no qualms about increasing GST to be paid by us. The 61% should take the blame for the suffering of the people as food costs are also sky rocketing.

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  • Asd:

    I think farmer gst wholesaler then it gst distributer then it gst the hawker then it gst the customer so how many times customer pay gst ar

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  • Billy ma:

    The plain truth is that GST is to tax the poor & the not well to do group of people.

    Yes it gets the rich & foreigners too, it doesn’t not affects the rich people much & for tourists, it’s in their budget anyway.

    For locals, it’s a life time tax from prebirth to post death.

    It matters alot, much much more than PAP is selling us.

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  • Light The Way:

    The incumbents refuse to accept the fact that their best years are over. They are having difficulty in growing their wealth. With every dollar they gain from the populace with increased hikes and inflation, they lose even more from failed foreign investments.

    The writing is on the wall, their time is up whether they accept it or not.

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  • xoxo:

    G$T as implemented here is totally regre$$ive as it burdens the poor proportionately more than the rich .
    Worse,for aged sgs with zero income ,G$T clearly EATS INTO THEIR LITTLE RETIREMENT savings.
    Aged sgs/ordinary retirees are being MADE TO CARRY *EXCESS BURDEN* from a G$T regime that is adminstratively OVER-SIMPLIFIED.
    The G ought to revisit the GST COLLECTION process and consider to EXEMPT BASIC NECESSITIES N BASIC MEDICARE services.
    Already,medical costs are rather exorbitant in Sg.
    Hospitals(govt n private) fees n doctor charges are $ky-high.
    If one were to strip the EFFECTIVE INFLATION RATE ,we could determine easily that medical cost increases have ACCELERATED FA$TER than even HOUSING OVER LAST 20 YEARS.
    MANY sgs are retired/retrenched at earlier age and have no company medical benefits unlike FTs who rob our job$.
    It is imperative now that the G REGULARISE N REGULATE MEDICAL COST and also consider EXEMPTING GST ON SUCH EXPENDITURES.
    The RICH WHO ARE ABLE TO ABSORB GST INCREASES like *peanuts* ; so too those who are gainfully employed as their salary increases do take into account increases in *inflation* that is also impacted by GST increases.

    TIME FOR WP TO PERFORM.
    MP ALLOWANCE OF $16K IS NOT SMALL SUM.

    SAME FOR PAP MPs to raise the GENUINE N LEGITIMATE BREAD N BUTTER CONCERN$ of elderly sgs,jobless n the NEEDY.

    Getting elected is not just for the hand$ome allowance or to SIT PRETTY.

    GST IS EASY MONEY THAT THE G CAN COLLECT BUT TO DO SO IN THE CURRENT MANNER OF GST ADMINISTRATION IS NOT FAIR OR JUST.
    THE GST ADMINSTRATION SHUD BE REFORMED TO FURNISH TRUE EQUITY.
    ALL EMCOMPA$$ING DOES NOT MEAN FAIRNE$$.

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  • NotMyProblem:

    “Tech: It is said that Sinkies have a very high threshold for pain, …. ”

    @Tech; when a frog being slowly boiled alive. Do you call that high threshold of pain or stupidity? I call that “Singaporeans”!

    I always wonder, 7 out of 10 adult Singaporeans are graduates of all kinds, from the best Universities around the world, but they can believe all the BS from the PAP. I don’t pity these graduates but I pity their parents.

    Why the 61% blaming the PAP for their suffering? They have had their choice, but they chose to be screwed!

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  • xoxo:

    As a simple illustration.
    Take P(oor) and R(ich).
    Says P has a DISPOSABLE INCOME OF $2000.
    R has $20,000.
    Take GST as 10 pct to simplify.
    And,assume spending on basic necessities is $1500 for P and $4000 for R.
    Gst for P on $1500 = $150.
    Gst for R on $4000 = $400.
    $150/$2000=0.075
    $400/$20000=0.02
    So,we note that the incidence on P is 7.5 pct of his $2000 disposable income .
    As for R,the effect is only 2 pct.

    From the illustration,POOR PAYS MORE PROPORTIONATELY THAN THE RICH.

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  • Golden Rule:

    Remember the Golden Rule –
    “He who has the gold, makes the rules”

    In Singapore, the rule makers are wealthy and will be pro GST that taxes everyone and Anti anything that affects the rich such as estate duty, inheritance taxes, capital gains or luxury taxes.

    Any of us would be of the same mindset if we were in the top 1%

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  • Smart Nation:

    xoxo:
    As a simple illustration.
    Take P(oor) and R(ich).
    Says P has a DISPOSABLE INCOME OF $2000.
    R has $20,000.
    Take GST as 10 pct to simplify.
    And,assume spending on basic necessities is $1500 for P and $4000 for R.
    Gst for P on $1500 = $150.
    Gst for R on $4000 = $400.
    $150/$2000=0.075
    $400/$20000=0.02
    So,we note that the incidence on P is 7.5 pct of his $2000 disposable income .
    As for R,the effect is only 2 pct.

    From the illustration,POOR PAYS MORE PROPORTIONATELY THAN THE RICH.

    Agree. Basic needs and necessities (food and groceries, household items, medical and healthcare) should be exempt from GST. It impacts the poor more than the rich. Senior citizens should be given tax-free days so that they do not have to pay GST on their shopping and purchases.

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  • Sporeans Keep Govt Employed:

    I think they know and they suck it up because most are employed in civil service, GLCs, and other govt related entities.

    They are not able to vote their employers out as they got housing, car loans etc to service.

    NotMyProblem:
    “Tech: It is said that Sinkies have a very high threshold for pain, …. ”

    @Tech; when a frog being slowly boiled alive. Do you call that high threshold of pain or stupidity? I call that “Singaporeans”!

    I always wonder, 7 out of 10 adult Singaporeans are graduates of all kinds, from the best Universities around the world, but they can believe all the BS from the PAP. I don’t pity these graduates but I pity their parents.

    Why the 61% blaming the PAP for their suffering? They have had their choice, but they chose to be screwed!

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  • only stupid people vote pap:

    xoxo:
    As a simple illustration.
    Take P(oor) and R(ich).
    Says P has a DISPOSABLE INCOME OF $2000.
    R has $20,000.
    Take GST as 10 pct to simplify.
    And,assume spending on basic necessities is $1500 for P and $4000 for R.
    Gst for P on $1500 = $150.
    Gst for R on $4000 = $400.
    $150/$2000=0.075
    $400/$20000=0.02
    So,we note that the incidence on P is 7.5 pct of his $2000 disposable income .
    As for R,the effect is only 2 pct.

    From the illustration,POOR PAYS MORE PROPORTIONATELY THAN THE RICH.

    Very well said. Agree.

    One more thing. For the jobless poor, GST is the same as squeezing blood out of stone.

    Tax should be on income ONLY. No income, no tax.

    pap says angmo all tax like that so why not pap?

    ffff.

    angmo does the wrong thing so everyone must follow?

    Why not use common sense. Tax on income ONLY.

    No income, no tax. Period.

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  • Soccerbetting2:

    Skilfuture credit-$500 (No expiry given in year 2016)(Singaporeans age 25+above)
    Skilfuture credit -$500(One off topup)(Expire 31st Dec 2025)
    Skilfuture credit -$500(One off top up given to citizen between 40 to 60 in year 2020)(Expire 31st Dec 2025)

    Total Skilfuture credit given to me and everyone -$1500.

    Response :Can the opposition MP ask the government why the first Skilfuture credit think declared by Tharman of $500 many years ago has no expirry date but the second batch of $500 skilfuture credit and the third batch of skilfuture credit has an expiry date of 31st Dec 2025 ?That means to say if we don’t use the second batch and third batch of skilfuture credit both $500 amount,after expiry and you don’t have it any more ?Why ? Shouldn’t all the skilfuture credit and that we don’t use it,then it should be channel as total $1500 into our retirement account when we reached 62 years old ?Isn’t it better this way given to all of us rather than take it back upon expiry ? Now you all can clearly see that point that skilfuture credit is not available to citizens as a form of help for you all to upgrade but rather it is precisely targeted to be given through all of us to be passed in a roundabout way to help schools in shopping mall or whatever to make more profits for their businesses! You all got see a simple basic handphone digital course of a couple of days also need to pay $600 per course (Of course,they give “subsidies”) to cover up the high course fees) !And some course provider may even tell you that you subscribe for the skilfuture course,don’t come to class also never mind and you may get some rewards return ! Pui !

    And those skilfuture credits that has been lost previously by conwomen ,has the government recovered those in full sum by now ?If not,why ?So is it using the second batch of skilfulfuture credit to cover up what is lost in the first skilfuture credit to cover up everything ????Or second and third batch got expiry date,easier to steal off future skilfuture credits by conwomen wing ?

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  • NotMyProblem:

    “Can the opposition MP ask the government why the first Skilfuture credit think declared by Tharman of $500 many years ago has no expirry date but the second batch of $500 skilfuture credit and the third batch of skilfuture credit has an expiry date of 31st Dec 2025″

    Well, when the credits expires, the remainder will go to somewhere. No body knows how much will be the remainder and where it would go to, right?

    I did not say anything about corruption, no never! You worry about online scam? This is the type of scam you should worry about!

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  • NUS Grads Hateful:

    Quite true and the most obvious are the NUS graduates – defenders of the PAP faith.

    Last time at some civil service orientation, some NUS goon asked in front of everyone if SIM degress are recognised by civil servie. He purposely asked because there were some SIM grads there. Never forgot that fat fiack’s face or the way he asked – demanding and entitled manner.

    Now they recognize degree mills and NUS have to work for GRAB. Go F spyder la , NUS.

    NotMyProblem:
    “Tech: It is said that Sinkies have a very high threshold for pain, …. ”

    I always wonder, 7 out of 10 adult Singaporeans are graduates of all kinds, from the best Universities around the world, but they can believe all the BS from the PAP. I don’t pity these graduates but I pity their parents.

    Why the 61% blaming the PAP for their suffering? They have had their choice, but they chose to be screwed!

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  • Hold Ho Ching accountable:

    The biggest investor in FTX are:

    (1) Temasek – US$300+m

    (2) Sequoia Capital – US$217m

    (3) Softbank – US$100m

    Ho Ching should be held accountable for this massive loss of taxpayers’ money. This is a big humiliation for Singapore and even more humiliating if she is not held accountable.

    Ho Ching’s “excuse” for the investing in FTX that Temasek can afford to be “contrarian” proves her stupidity and incompetence. FTX did not have a chance of succeeding because it was a fraud, a Ponzi scheme. Temasek did not know detect this even after spending 8 month doing due diligence. WTF.

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  • xoxo:

    @Smart Nation & @ only stupid people vote PAP

    THANK YOU FOR SHARING YOUR VIEWS.
    Its a delight always to find sgs of like-mindedness.
    Let us always remember the less fortunate especially the poor among us.
    The RICH N POWERFOOL$ must be constantly *reminded* that there are such things as compassion and justice…
    Merry Christmas to you both.

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  • $ $ $:

    That’s where certain kind of people will get millions teaching you how to dress.

    NotMyProblem:
    “Can the opposition MP ask the government why the first Skilfuture credit think declared by Tharman of $500 many years ago has no expirry date but the second batch of $500 skilfuture credit and the third batch of skilfuture credit has an expiry date of 31st Dec 2025″

    Well, when the credits expires, the remainder will go to somewhere. No body knows how much will be the remainder and where it would go to, right?

    I did not say anything about corruption, no never! You worry about online scam? This is the type of scam you should worry about!

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  • Sporeans Keep Govt Employed:

    Can I convert skills future into gst vouchers?

    No use for skills future credits

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  • Smart Nation:

    xoxo:
    @Smart Nation & @ only stupid people vote PAP

    THANK YOU FOR SHARING YOUR VIEWS.
    Its a delight always to find sgs of like-mindedness.
    Let us always remember the less fortunate especially the poor among us.
    The RICH N POWERFOOL$ must be constantly *reminded* that there are such things as compassion and justice…
    Merry Christmas to you both.

    Most welcome and a Merry Christmas to you too!

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  • only stupid people vote pap:

    xoxo:
    @Smart Nation & @ only stupid people vote PAP

    THANK YOU FOR SHARING YOUR VIEWS.
    Its a delight always to find sgs of like-mindedness.
    Let us always remember the less fortunate especially the poor among us.
    The RICH N POWERFOOL$ must be constantly *reminded* that there are such things as compassion and justice…
    Merry Christmas to you both.

    Best wishes to you too.

    Best wishes to TRE Tech for his hard work throughout 2022.

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