[maxsanic]

Each time you walk into restaurant and order anything, you likely end up paying for another bowl of noodles for gst. You multiple that for everyday once you paid 30 bowls of noodles. If a noodle of ramen cost min of $12, you paid $360 gst each month and a year it will be $4320.

It is therefore wiser to get the huge middle class to be paying this gst cos it means big earnings. And then you pass some to poor as gst rebates.

Actually this is a very good observation. The idea of GST in Singapore is actually a form of wealth transfer from Middle and Upper Class to Lower Class. For obvious reasons, the government doesn't want to say it too explicitly as this will piss off the vast majority of middle class PMEs, but if you work out the Math it actually makes sense.

For e.g. In 2021 the lower class will get in total GST rebates of $500 (cash) $250 (Medisave for retirees) $595 (u-save for 1-2br HDB). That works out to $1,345, i.e. 1345 / .07 = $19,214 spending that is in effect free of GST. I would imagine most lower income class people spend lesser than $19k p.a. so they basically don't pay any GST (effectively 0%).

The middle class on the other hand will get $475 (u-save for 4br HDB) only so that works out to $475/.07 = $6,786 expenses that are GST free, so this means for middle class household, the first $6,786 per year of expenses are GST free and anything on top 7%. Assuming a middle class household spends $5000 a month, that means they will pay about ($60,000 - $6,786) x 7% = $3,725 which translates to an effective GST of 6.2%.

Upper class basically get no rebates so their GST tax rate is 7% from the first dollar spending.