Previously, a bottle of coke at Ang Mo Supermarket costs only $0.90. Cheapest among all the supermarkets. Today I went to buy, the price has shot up p to $1.20 per bottle. An increase of $0.30, which is far more than the 1% GST increase.
A common misconception over GST is that a 1% increase means just 1% in the price of a product you buy, eg - 1% of 90cts would only mean now the product should cost only 91cts at most. That's a fallacy because Goods & service tax increase of even 1% affects EVERY aspect in the manufacture / production of a product for the consumer:-
A)The manufacturer of the cola can would have to pay an increase for the material & EACH of the supply chain - mineral resource + logistics + wharehousing + labor costs, etc, & eventually it adds up to between 1 to 15% increase in the cost of cola can production.
B)The producer of liquid cola too would face similar increases of 1% in production within its eco-system of supply chains - water, chemicals, logistics, etc. 1 to 15% increases
C) The importer/retailer of cola too would face similar increases - wharehousing, logistics, marketing, etc. 1 to 15%
Thus, by the time the consumer buys the cola, he would face a whopping (A) + (B) + (C) increases = avg 10% X 3 = 30% INCREASE in price of cola. = $1.10 to $1.30cts. And that's just one can of cola consumer product.
EACH day, a consumer buys several products, and by the end of the month, his salary is left with little savings. It is not that biz entities are profiteering, but they are only keeping their usual profits INTACT by PASSING ON all costs to consumers. Eventually too, they would see their savings depleted as they are become a consumer too, & subjected to GST for their personal purchases which are often higher than the average salaryman.
Ultimately, GST is way to obtain revenue for a nation's social expenditure - govt services, security, health, education, public works, etc, or for its expansion when the population increases. Fortunately, Singapore is not a corrupt country. Each dollar obtained is for society's progress. Furthermore, the govt does look out for the welfare of the middle & poor classes by giving rebates in cash & services back to citizens, to cope with such increases.
In the end, the consumer is king, as he/she has a choice - to buy or not to buy products. We Singaporeans live in a Free Market economy, thus open competition will see profiteers suffer as the market can be brutal - only the best & the most innovative whom can give value to consumers will survive.