The real cost of GST
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Jan 10, 2012 - ST Forum
MY SINGAPOREAN friend who travels regularly to Hong Kong told me that he stopped buying many electrical products from Singapore as he can get them 20 per cent cheaper in the territory.
What accounts for this difference? Singapore imposes a goods and services tax (GST) of 7 per cent, but what about the difference of 13 per cent?
Although commercial rentals have been escalating in Singapore, they have always been high in Hong Kong.
I suspect that the real cost of GST is more than 7 per cent. There is the heavy compliance cost, especially for small businesses, of keeping accounting records of GST input and output, and submitting quarterly returns to the Inland Revenue Authority of Singapore.
There is also the multiplier effect of GST, as small businesses may not be able to get the full benefit of the refund from GST input. The higher cost of living faced by employees as a result of GST has to be reflected in their salaries, leading to a multiplier effect.
Businesses in Singapore also incur the cost and inefficiency of making and receiving most of their payments by cheques. There is also the high cost of complying with many regulations. Even the calculation of monthly Central Provident Fund contributions can be a headache, given the different rates of contribution for different employees.
Another friend, who has experience with manufacturing costs in many countries, told me that manufacturing in Singapore has become rather uncompetitive and can be sustained mainly by tax incentives and concessions given to some multinational companies. This is not a healthy trend for our long-term development.
I hope the Government will take urgent measures to address the underlying obstacles to our competitiveness and the causes behind high business costs.
Tan Kin Lian
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1) Shipment fee (Eh, where the electrical/ electronics item are orignated from).
2) Warehousing all the logistics cost
Dunno wat else
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with the type of salary they get do you think they care about the difficulties an average singaporean face?
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High gst is to help the poor.
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The real issue here is the money supply, not enough money is being circulated in the economy, more folks like me and charlize have less spare money to spend.
That's why an Abercombie & Fitch shirt cost US$80 in America (which has a higher cost of living) compared to SG$130 in Singapore. Retailers will sell less of the product in Singapore compared to USA, therefore they have to increase the margin to make a similar profit.
If I not wrong, I think Hong Kong and Malaysia with lower GDP per capita has more money supply circulating in the economy.
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But where has all the money gone?
HDB, GST, Medical and other taxes.
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Originally posted by βÎτά:
But where has all the money gone?
HDB, GST, Medical and other taxes.
commoners ponzi funds.
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education?
i have $800+ in my edusave.
last time i used my edusave was like i was in P6.
now i sec2, still haven't use.
must find a way to spend the money.
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Originally posted by βÎτά:
But where has all the money gone?
HDB, GST, Medical and other taxes.
gone to help the poor!
the poor chaps who had to sacrifice to serve otherwise they would have make more if they are in the private sectors
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I envy my friends who are doing business, at least they can pass the cost of their GST to consumers. Am I right to say that?
However for working people like you and me, every expense we pay, we are charged the GST but its something we won't earn back because our payroll doesn't have that.
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Times are bad.