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http://therealsingapore.com/content/case-why-does-government-charge-gst-other-taxes
Why Does The Government Charge GST On Other Taxes?
Post date:
4 Mar 2015 - 11:28am
The Consumer Association of Singapore (CASE) has raised concerns about the double taxing occurring with some dutiable items and GST.
They pointed in particular to items such as petrol, cars, and cigarettes, especially on the back of the recently announced petrol duty hike.
They pointed out that GST in Singapore, a 7% blanket consumption tax, is applied on items after other taxes have been applied.
For example, petrol could be sold at the pump for $1.35 per litre without any taxes. If 7% GST is applied at this cost, the GST would come in at about 9.45 cents.
However, there is a petrol duty of 56c a litre, and GST is calculated after this tax is applied meaning the total GST paid at the pump is about 13.37 cents per litre, almost 40% higher than if GST was applied before the petrol duty.
A similar issue is seen with other taxes such as the luxury car taxes.
In fact, it is even seen in smaller purchases such as the water conservancy tax that all Singaporeans pay on their utility bills. (Dear TRS, We are being charged tax on taxes! )
All this excess GST collected boosts government revenue but at the same time, it burdens consumers.
In response to the concerns, the Ministry of Finance dismissed the issue saying that it was common in many countries to apply GST to the final prices even after taxes were applied.
It looks like we will continue to pay Taxes on our Taxes for a long time still.
