Sunday, February 25, 2018

Bad reasons to impose GST

The suppporter of GST has put up three reasons why they think that GST is "good" for the country. They said:

a) GST is on spending. If you don't spend, you do not need to pay GST.
b) GST catches people who do not pay income tax, such as hawkers, taxi drivers and the self employed.
c) Most advanced countries have GST. They can't be wrong, right?

Let me debunk these reasons.

a) GST is on spending. If yo don't spend, you do not need to pay GST.
Really?
Do people need to spend on food? Medicine? Doctor's fees? Drink water?
They have to pay GST on all of these spending. Can they stop eating or fall sick?
The low income people spend most of their meagre earnings on these items. Why tax them through GST?

b) GST catches people who do not pay income tax, such as hawkers, taxi drivers and the self employed.

Really?
These people are already paying high rentals for their stalls and hire of taxis. If the government wants to have revenue from these people, take it from the rentals and hire charges.
Most of these people struggle to make a living.

c) Most advanced countries have GST. They can't be wrong, right?

Really?
Do these countries have COE (for purchase of vehicles) that contribute to a large part of the tax revenue? Do they have a large land bank that they can sell each year to get the revenue? Do they impose a levy on foreign workers?

COE and vehicle taxes contribute to $9.2 billion in 2017. The revenue from land sale is expected to be about $20 billion a year. I am not able to find the revenue from foreign workers levy

With these revenue sources, there is no need for the finance minister to levy GST.

We have to act boldly and get rid of GST. This will reduce the cost of living and improve the life of the people. The government can afford to remove GST and still have a healthy budget surplus.






Tan Kin Lian

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