Singapore Entrepreneurs

1. Harro!

   Is GST 7% for the RICH?

   The 7% GST proposed by the Singapore Govt. does not seem excessive since some other countries have 10 to even 13%. However it depends on how the tax is implemented. Take a look at the following examples and one begins to wonder is the tax helping the rich or the poor?.

   Subject: GST 7%

   For those residing in Singapore…(this was sent by an ex-auditor)
   Hmmmm……

   Example 1
   In 2006, if after rebates etc and your net taxable income is $60,000,
   the income tax you need to pay is $2,700 (8.75%). If you spend $800 a
   month on needed goods and services, the GST paid for 5% will be $480
   Total=$3,180 in Tax paid.

   In 2007, if after rebates etc and your net taxable income is $60,000,
   the income tax you need to pay is $2,600 (8.50%). If you spend $800 a
   month on needed goods and services, the GST paid for 7% will be $672
   Total=$3,272 in Tax paid.
   From $3,180 to $3,272, the effective increase is 2.89%.

   Example 2
   In 2006, if after rebates etc and your net taxable income is
   $400,000, the income tax you need to pay is $61,650 (21%). If you
   spend $4,000 a month on needed goods and services, the GST paid for
   5% will be $2,400 Total=$64,050 in Tax paid.

   In 2007, if after rebates etc and your net taxable income is
   $400,000, the income tax you need to pay is $58,700 (20%). If you
   spend $4,000 a month on needed goods and services, the GST paid for
   7% will be $3,360 Total=$62,060 in Tax paid.
   From $64,050 to $62,060, the effective decrease is -3.11%.

   Example 3
   In 2006, if after rebates etc and your net taxable income is $25,000,

   the income tax you need to pay is $187.50 (3.75%). If you spend $800
   a month on needed goods and services, the GST paid for 5% will be
   $480 Total=$667.50 in Tax paid.
   In 2007, if after rebates etc and your net taxable income is $25,000,
   the income tax you need to pay is $175 (3.5%). If you spend $800 a
   month on needed goods and services, the GST paid for 7% will be $672
   Total=$847 in Tax paid.
   From $667.50 to $847, the effective increase is 26.89%.

   The fact is: The poorer you are the more the GST is going to make you
   poorer

   Nov 30th, 2006

2. Daniel

   Any form of GST increase is bad. There is no such thing as giving away money and still is consider good.

   Nov 30th, 2006

3. Little Porcupine

   I think the 7% is quite reasonable. Personally for myself I get around 33% of income tax?? So I get tax quite alot of money from my income and I also get tax 33% from my bonus. And I still had to pay 12.5% of GST. So compared to calculation above it’s even worst.

   So I think Singaporean are quite lucky to get tax so little. Even the $400K tax of 20% is no big deal. Example if my aunt earn 1,000,000 a year she get tax 66% of her profit. How much does she truly earn? Plus GST not included?

   And my friends who earn 6 digits they are all heavily tax of 33-66% that’s even worst. Which end up we earning peanuts for monkey only by the end of the day.

   So truthfully, from the calculated tax above it’s nothing compared to us. And you guys are quite lucky. We do pay alot of tax and also other expenses which we need to cover as well.

   Dec 1st, 2006

4. Blightfire

   The problem here is not how much the GST, but how it affects the different income groups. What these calculations above is pointing out is that the poor is more affacted by the increase. And the methods the government is doing to “ease” this is buy offering a one off payment supposedly to offset the effect of the GST increase. Yet this is not an extremely effective method nor the best. Considering how much “Ideas” our lovely NTUC has contributed, they can easily implement the most effective method of lowering the impact on the poor by actually staggering the GST, with basic neccessities like bread and butter getting a 0% tax.

   Feb 10th, 2007

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