An observation of the true impact of GST

last SG · 2007-07-02T14:16:41+00:00

Yesterday I read in Today, a guy going to a herbal shop wanting to buy a herbal drink found his usual drink increasing from $1.50 to $1.60 He proceeded to m...

soul_rage SG

Dear all,

The GST was just upped to 7% on Sunday (congrats to all PAP supporters who don't understand the impact). I am making my observations of some of the issues of this GST rise, anyone is free to support/contest my views

1) GST up by 2% is NOT price increase by 2%
I find that quite a bunch of Singaporeans are really stupid in this. They think that, assuming a product is $10 (excludes 5% GST of 0.50) now, then the increase of the product price after GST implementation is by only $0.20 (since 7% GST of $10 is 0.70).

What they failed to understand is that in an end-product, there are many parts in the supply chain to this product.
- Some of the suppliers are not GST-registered, and thus they cannot claim GST from the govt, thereby passing the increase in GST costs from their suppliers to the next company in the chain. This will translate to an increase in costs for the next company, which will then filter down to the end-user.
- Changes in GST, results in system changes (for large companies) or admin costs for smaller companies in that they need to make changes to their processes to adopt the 7%. This results in higher costs for companies, and they pass it on by increasing their prices

2) Companies that sell items at prices such as $11.60, for example, cannot increase their GST amt to 7% exactly, becoz it will result in 1-cents, (for the above case, its rightfully $12.41), which most probably will round it UP ($12.45 or $12.50). Becoz Singapore doesn't use 1-cent anymore, the businesses round up prices to the nearest 5 cents

3) Some restaurants, such as Delifrance, round UP the cents to make more money (just check your receipt the next time you eat with them). They are so blatant that, even if you spent for example, $21.55 (AFTER GST), they will still round it UP to $21.60. That's why I don't eat from Delifrance. They DO NOT follow the laws of mathematics. $21.51 is STILL $21.60 (still round up)

4) Hawkers raise prices at $0.50 almost all the time. I see lots of increases already in the place I stay

End of the day, I think many people are going to suffer. The GST incentive the govt give you aren't going to last too long, given that increases are more than 2%.

4getmenot SG

tats y some ppl doesn't realise that GST creates a ripple effect ending up with consumers who have to suffer Evil or Very Mad

Kenashi SG

know oso no use
just have to save up enough to leave this place for gd Laughing
ignorance is a bliss for most ppl

jetabt767400 SG

You can read my other post in related article.
I finish all the money given liao, it was like so little...
But I will continue looking for more related and interesting things...

Gazelle SG

a) Why cant the seller round off 12.41 to 12.40, why must it be 12.45 or 12.50? Are you assuming that buyers are stupid and most trade in Singapore are monopolised?

b) How delifrance round up or round down their pricing is a double edge swords and it doesnt really matter if there is 2 percent GST hike or not.

c) What do you mean by hawker raising price by $0.50 all the time? Care to name us a few hawker stalls which you claim have profiteer from the GST increase?

matleep SG

This is not entirely right. It all depends on the companies in the supply chain. In short, i would prefer those in the lower chain to be non-GST registered and those above to be GST registered. And the more non-GST registered firms, the better it is.

soul_rage SG

Care to explain your rationale.

Interested to know your perspective of this supply chain, as its here that mostly prices change and result in consumer paying more

Coquitlam SG

Relax soul_rage....we have seen this time and again and by re-iterating it over and over again....it won't solve a thing...besides, the gahmen would not be in power if every Sillyporean were smart....there has got to be some stupid sillyporeans to tow the line.....best thing you can do is liek what many of us have done...emigrate

Better to watch all the goings on in Sillypore from a distance and how they will run themselves to the ground and just have a good laugh after that.....more practical to take care of yourself first

soul_rage SG

As mentioned, its my observations
a) yes, the fact is, many would round up, and most people wouldn't notice
b) If the GST was 5%, there will not be the 1-cent problems (1-cent, 2-cents, 3-cents, 4-cents, 6-cents, 7-cents..). People find it hard to transact in cents, so there are businesses who profit from it by rounding up (actually I am interested to know how they report their GST, since they first compute GST in the bill, then ROUND UP, which technically means that they are paying lesser GST than supposed to)
c) Do you need me to name for you? I think you should have heard of the $0.50 increase in price that is always evident in hawker price increases a long time ago. Its up to you whether you wish to accept that its almost always true.

as above, these are my observations. So don't go about asking me for statistics. People who see with their hearts can see the change. Those who see with their eyes (such as those who read the ST and read about people being happy with the GST incentive) will never be able to see the changes.

maurizio13 SG

My place the hawker center you tiao (fried dough fritters) used to be 40 cents, on July 1st, they raised it to 50 cents, an increase of 25%.

Trump_Card SG

The singapore govt is culturing this kind of singaporeans its not strange ...

will4 SG

U should observe the hawker centre in heartland so pitiful after increase price, some automatically close for good.

miserable SG

Okay.....now we seen the hike in GST, where is the so proposed helps for the poor ???

soul_rage SG

hang on minister pay first, then breadcrumbs give to the poor.

soul_rage SG

tea up 10 cents from 70 cents. (14% increase)
bowl of mushroom noodles up 50 cents from $2.00 (25% increase)
western food up 30 cents from $4.50 (7% increase)
western food up 50 cents from $4.50 (11.1% increase)

I know what Gazelle is going to say next. He will say there is no proof whatsoever that the increase is due to GST, despite the FACT that these stalls increase prices on/close to GST raising day

Gazelle SG

Soul_Rage, if your intention here it to help the poor, I would suggest that you write to the government and highlight to them that the concerning hawker you mention are profiteering from the GST hike. Unless of couse you are just here to talk co,ck sing song,

soul_rage SG

*yawns* if you have nothing to add, and think that the GST hike is justified, why don't you explain your stance instead?

As I mentioned, I am highlighting my observations. Whatever intention I have is for me to know, I don't have to explain myself to you.

matleep SG

hard to explain. but basically if every company is GST-registered, then we pay only 7% GST. Depending on the situation, we could pay more than 7% or even less than that. let me show a situation where it is less.

Company A, a non GST-registered company, buys its goods for $107 which $7 is GST. He sells them for $207. So only $7 is paid as GST and the selling price is $200. Thus, GST is only 3.5%!

LinYu SG

cigarette up by 40 cents
old cairport stalls up by 50 cents after reno
Evil or Very Mad

maurizio13 SG

Geez! Nazi these days don't even allow you to state observations in forums. I wonder if he has a swastika tatooed on his forehead.

I would say it's a case of double standards, when they state their observations, it's ok, when someone states their observation, they are being told off.