Question: What is worse than income tax?
Answer: Income tax and GST.
It is wasteful for a country to have both income tax and GST. It lays a heavy burden on businesses to keep two sets of accounting records to report their earnings (for corporate tax) and for GST. This adds to the cost and complexity of doing business. It is wasteful for a country to collect tax (GST) on every item of transaction every day.
IRAS claims that GST is simple. That is not correct. You can read the GST instructions in IRAS website to know that it has many rules that have to be followed to prepare a GST return - similar to the complex rules needed to prepare income tax returns.
Critics argue that GST is unfair to the lower income group. I agree, especially as they do not earn enough to feed a family. To top it up, GST is also an inefficient tax, adding unnecessary cost to business, that has to be passed to consumers.
I am aware that any Government needs to collect enough tax revenue to fund its operations and take care of the country. Tax is necessary and important. But, we need to have more efficient and fair ways to collect tax. GST is one of the worst methods that has been devised, especially as it is implemented as an additional layer on top of income tax (personal and corporate).
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