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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