Tan Kin Lian's Blog: GST - troublesome and ridiculous

Tuesday, March 22, 2011

GST - troublesome and ridiculous

My friend runs an insurance agency. He has received incentive payments from insurance companies for the past years. Recently, he was told that the incentive payments attract GST. He has to collect GST from the insurance companies, and pay the GST to IRAS. Because of the unclarity of GST for such payments, he did not collect the GST in the past. To comply with the a recent circular, he has to collect the GST for the past years from the insurance companies. y. He was also levied a fine for failing to obey the GST law.

It will take him some time to collect the GST from the insurance companies - but he paid the GST first to IRAS. After making the pyment, the insurance company can recover the GST back from IRAS. the government. Yes - it is an exercise of futility. It is troublesome and unnecessary work that add to the cost of doing business in Singapore. Many businesses have experienced high operating cost and can only survive by over-charging consumers. It has became a vicious circle.

My friend has approached a senior IRAS officer on this matter to explain that this is an exercise in futility. But the senior officer refuse to make an exception and insisted on following the book. This is quite common in Singapore.

Tan Kin Lian

8 comments:

rex said...: Rex comments as follows,
For the ordinary people, and there are hundreds of thousands of households, every month, we are taxed TWICE in PUB bills.
Water Surcharge Tax 30% is added into your bill on monthly basis if consumption exceed "average of households". Now who determines this magic average number, is it audited? Average 10 years ago may not be the norm today...

The problem is that after the calculation of the 30% surcharge tax, GST is compounded on the calculated gross amount again!!!. So you pay another 7% of the 30% already taxed. Check your bill to believe me! You may not see the problem if you are the lucky few who use very little water and electricity and not paying 30% surcharge consumption tax.

Does anyone notice? IT is small money perhaps for one household. But monthly basis, hundreds of thousands of households and businesses... taxed GST against a TAX, this is double taxation , it increases the burden on many people unnecessarily.

How to complain? How to claim back the money "stolen" in this way by the govt each month? There is no avenue, people think this is small matter. But accumulate on monthly basis over hundreds of thousands of consumer bases, a lot of injustice is done.

And PUB ofen say they just charge at cost when raw materials cost of oil is increase. Why then is there additional GST against the raw material increase... it is not luxury item, water and electricity, for the bulk of us. Water and electricity is life and death, they are not like Rolex or Ferrari. First why are we taxed 7% and second why are we taxed twice!! It's not fair. My pub bill getting very high nowadays.

rex; March 22, 2011 5:25 PM
Unknown said...: Mr.Tan,
The senior officer has no choice, he just follow the law passed by parliament. He cannot grant exception as it is not within his authority to do so.

As for REX comment, I agreed totally.

Walau Tan; March 22, 2011 8:49 PM
yujuan said...: Who says we are't aware about the double taxation on water usage on our monthly bill, someone did make a complaint, but the authorities kept quiet. Nowadays when they could not give an answer, they just keep quiet, so that people could not do anything. The attitude is
"I am the Govt what, you duds just shut up."; March 22, 2011 10:23 PM
Lye Khuen Way said...: This Double-taxation issue is akin to the TV & Radio license that was just abolished in that the Authorities involved knew the injustice for ages, but do not bother to put it right. I am still waiting for my past 7 years worth or TV & Radio fee refund ! Yes, 7 years worth.; March 23, 2011 6:22 AM
Tan Kin Lian said...: Reply to Walau
The senior office has the choice. The law passed by Parliament is quite broad. There is a lot of room for interpretation, especially for grey areas such as this.
The trouble is - in Singapore, people in power do not wish to take responsibility, and will write the rules more rigidly than necessary. This is Singapore culture - which should be changed.; March 23, 2011 8:25 AM
rex said...: Rex comments as follows,

On a more positive note, i think the correct thing to do regarding water and electricity is simply as follows:
1.Abolish immediately all gST on water and electricity for households.
2.Implement a surcharge of 30% on usage exceeding a certain preset amount based on household national average, and this needs auditing by indpendent firm. (and, no further GST applied to that surcharge!)
3. Provide avenue for families with special needs to claim part or full waiver of the water and electricity surcharge.

Of course this is dream. The reality is the govt need to continue to amass huge quantities of cash in whatever ways it can, to sustain the lifestyle and salary levels of the dynasty.

rex; March 23, 2011 8:37 AM
COMMON CENTS said...: Guys, no point complaining. this coming GE is your chance to make a choice, to make your voice heard, how you want your life to be.
Do you want to continue having many of the same kind in parliament who pass bills without thinking about poor and without substantial debate or would you help vote into parliament a substantial number of the other kind who can represent you to stand up to injustice lawfully?; March 23, 2011 9:25 AM
freemanland said...: http://160.96.186.100/lib/pdf/2007/Jul/ST1227.pdf; March 23, 2011 11:24 AM