[OFFICIAL][LIVE 18 Feb 3:30PM] The 9% GST Budget

[beta93]

I think if there's input and output gst, it's more than 2%.

Gst is a regressive tax that hits the poor more but Singapore has a very high proportion of high income earners. Who gst is meant to hit are those maids and construction workers mostly unless they don't have to pay gst...

Gst is a good tax because if you plan spending wisely, you will end up being rewarded with less tax and less consumption which mean less pollution to mother earth

 

[Cometdevil]

the above is correct in a emh scenario

real life dont work this way

just compare the prices of coffee at your usual coffeeshop and u get your answer

I don't understand what is with all the math calculation. The reason why it will not be 2% hike is because Singapore import all the different things from all over the world. Taking into account the hike of price without the GST due to inflation, it is already more than 2%. Adding to the GST it will definitely be more than 2%. The logic is 2% gst hike is only 2% is when you are producing your own good and services and part and producing the final good to consumer. That is when you get 2% gst hike which is truly 2%.

Our govt is too textbook thinking. Gst hike will never be 2% unless u know how to produce your own good for your own economy

that why some people are saying 2% increase in GST is not the real thing to blame for the current price increase, it is due to inflation, which is not GST linked..

and that GST is not cumulative la. that is the main discussion point isnt it?

and as also mention, in real life final goods price impact will not be just 2% due to many reasons, extra profit etc inflation etc blah blah.
but shouldnt that be another topic all together?

 

[NTB2DO]

the 2% pass down to the final consumer lo.
lets say this seller selling A is not GST registered, seller cannot claim the 2% addition back. he also cannot add another 2% GST since he is not registered. the final price passed to the consumer is still just additional 2% lo.

if the seller is GST registered, he should be able to claim back the 2%, which essentially means his A will not need to x 1.02 as cost. but at selling he charges the additional 2% to be incurred by consumer.

end of day no matter what, the final consumer will only kana the 2%. that is why GST only affect the final consumer. this is my understanding.

if anything wrong please enlighten.

Ok I get your point.

 

[wanabfit]

that why some people are saying 2% increase in GST is not the real thing to blame for the current price increase, it is due to inflation, which is not GST linked..

and that GST is not cumulative la. that is the main discussion point isnt it?

and as also mention, in real life final goods price impact will not be just 2% due to many reasons, extra profit etc inflation etc blah blah.
but shouldnt that be another topic all together?

because business owners will just lump everything on Gst increasing hence they have to increase their pricing to offset their GST cost

 

[DumperDuke]

policymakers very satki, they help to smoothen the increase by 1% each for the next 2 consecutive years instead of increasing it by 2% at one go

end up businesses benefit from it as they can double up their prices twice in a row for the next 2 consecutive years

will be a nightmare for accounting and taxation as well

Come 2024 the 1% will be deferred to the future and by doing so will gain more votes in 2024/2025

 

[TimsTom]

If by this logic, then wouldn't it make more sense to be 2/107

Example :
last time govt collect 7%, collect till 7billion
After increase, for selling the same amount of goods and services, govt collects 9%, 9billion.

So tell me, isnt this uprise a 20+% increase in the tax collected? Why u wanna bend it to say 2/107 leh?

 

[charleslee1989]

Conditions for claiming Input taxes


Better read up or else you anyhow pay tax to the government...

 

[SBC]

Suddenly the sleeping but smart ones had started to wake up.

 

[tomasulu]

Cue the self hating confused sinkies coming out of the woodwork defending this round of tax increase by saying it helps reduce the need for future tax increase.

 

[henghengonedragon]

its okay. GST is good for the poor

Very good until they get less cai png.

 

[harbinger255]

Example :
last time govt collect 7%, collect till 7billion
After increase, for selling the same amount of goods and services, govt collects 9%, 9billion.

So tell me, isnt this uprise a 20+% increase in the tax collected? Why u wanna bend it to say 2/107 leh?

Yes there is an increase of 20+% in taxes collected....

Mathematically it's the rate of change. If you look at it per increase, 20+%.... If you look at it wrt to the years since last increase in 2007, it's another %

Then if you want to look at the relative increase for consumers (all that talk about cumulative aside) it's 2/107%

I'm not saying the maths is wrong ; is just meaningless. It's like you score 50 for a test... Next test you get 55 > that's a 10% improvement. 3rd test you get 56... Are you going to brag got a 20% rate of improvement?

 

[Darth_Yang]

Business will use GST increase as excuse to wack ppl hard... N they can do it 2 times .. over 2 years..

 

[charleslee1989]

This GST hikes will inevitably harm the population in one big way. Hawkers are largely not GST registered, but their suppliers are largely gst registered. Correct me if I am wrong lah.


For e.g, making a living in a hawker centre as a solo Hawker

Rental cost before GST : $1514/ month ( from NEA site)
Operating cost ( includes cleaning and gas) per month before GST: $1000/month
Food material cost/ bowl of meepok : $2.00/bowl

Total cost : Fixed Cost : 2690 sgd, Variable cost = $2/bowl. After factoring in 7% GST, Fixed operating Cost = 2878 sgd/month , variable cost = $2.14/ bowl

List price per average bowl of mee pok : $4/ bowl

Assuming an average hawker sells about 100 bowls a day for 6 day work week, he gets 9600 sgd per month in revenue. Minus the food material cost and fixed cost , he get $2110 a month in profit . Siao, like that how to make an actual living?

So when the 8% GST kicks in,

The total cost with GST : Fixed cost = $2905.20, variable cost : $2.16/bowl

Now, the profit becomes = $1510.80/ month


Given how stiff the competition for business in the hawker centres, I don't think the Hawkers would want to raise the prices of food so much as well by becoming GST registered which will make the accounting so much more complex just to claim the input tax.

So, the food prices in F&B will inevitably rise. All of us suffers!

 

[fallen1]

Hawker went from 3 to 3.50. That not 2% and it's pre GST.

50 cent nia
Mine here from 3.80 become 4.80

 

[Soccerpunter888]

Not all companies are GST registered so those that aren't, they confirm pass on to the next chain.

even if they are, they will still increase

2% is just a facade.

 

[Square Box]

In theory, the increase is only 2%...
but you think supplier to vendor, vendor to merchant, merchant to consumer, will only increase by 2% at every stage?
People will cite increasing cost to increase prices. Even asking salaries would increase and cite the increasing cost of living.
Another unintended consequence which the ivory tower inhabitants have no foresight to think of.

 

[Begonia]

Gst effect IS cumulative.
Eg. i buy from supplier $1, pay $1.07. Add my costs and profit $0.50= 1.57. Sell to consumers 1.57 x 1.07 (gst) = 1.68. So ttl gst is $0.07 + $0.11 = $0.18. Although this 18cts is 7% of final product price of $1.68, if it goes through many intermediaries before selling to consumers, and every intermediary adds 7% gst to the product price, the ttl gst paid snowballs. In the example above, if i make product myself for $1.00 and sell direct to consumer, my selling price is $1 + $0.50 = $1.5. Price inc. gst = $1.5 x 1.07 = $1.61, lower than $1.68.

Yes, every time when the same money 'change hands', the garmen earn. I'm not educated in economics, I think garmen only earn one time in income tax, albeit at higher %? But this kind of GST, garmen earn many many times.

Can check this thing called velocity of money. Again I stress, I'm not economy or money-educated.

 

[celestial517]

If you are gst registered, you just input output tax. Nett is 0. The gst is passed through to the next line.

If you are not gst registered, you pay all the gst from your supplier (goes to gov) but you don't need to charge gst down the line. You just mark up if you want to pass the cost down. That mark up doesn't go to gov as tax.

Only time got compound if you are gst registered then you get supply from a non gst registered.

 

[TimsTom]

Yes there is an increase of 20+% in taxes collected....

Mathematically it's the rate of change. If you look at it per increase, 20+%.... If you look at it wrt to the years since last increase in 2007, it's another %

Then if you want to look at the relative increase for consumers (all that talk about cumulative aside) it's 2/107%

I'm not saying the maths is wrong ; is just meaningless. It's like you score 50 for a test... Next test you get 55 > that's a 10% improvement. 3rd test you get 56... Are you going to brag got a 20% rate of improvement?

1) the first relative increase is also 2/100 la. What 2/107?
2) 56/50 is also not 20%.. what u talking?

 

[harbinger255]

1) the first relative increase is also 2/100 la. What 2/107?
2) 56/50 is also not 20%.. what u talking?

Oh now it's 56/50 and not (6-5)/5 * 100% anymore?

from 7% to 9% is

（9-7）/7*100=28.6% increase

and if you use pappy maths, that is 30%