From: yar@cs.su.oz.au (Ray Loyzaga)
Subject: Re: GST - Bloody Stupid
Reply-To: yar@cluster.cs.su.oz (Ray Loyzaga)
Organization: Basser Dept of Computer Science, University of Sydney, Australia
Date: Tue, 29 Sep 1992 05:45:46 GMT

In article <1992Sep28.232329.23488@mel.dit.csiro.au: ajw@squid.mel.dit.CSIRO.AU (Andrew Waugh) writes:
:In article <1992Sep28.062504.15816@cs.su.oz.au: yar@cluster.cs.su.oz (Ray Loyzaga) writes:
::In article <chris.717651403@suite.sw.oz.au: chris@suite.sw.oz.au (Chris Maltby) writes:
:::GST is also a way to get ordinary people to do the work of public servants
:::for nothing. Each small business (take the place you buy your lunch from)
:::will now have to do an extra hour (or so) of unpaid work each day to
:::calculate the amount of tax they now owe, and will have to deal with the
:::tax office bureaucracy on a regular basis to sort it out. Is this what is
::
::This is a Labor Party furphy, the way GST will be collected is that
::a vendor will need to send in a statement of turnover, for which they
::will need to pay 15% to the tax office. They will need to keep account
::of the items sold if they want to (and they bloody well should!) claim
::the 15% back on the cost of the items they have sold. (i.e. they
::only pay 15% for the value added.)
:
:As you say, to claim the 15% back a business will need to keep records of the
:items sold. I do not agree, however, with your implicit assumption that the
:keeping these records will always be economically feasible.
:
:The relative cost of keeping the necessary records will rise as the unit cost
:of the sales falls. A wholesaler sells in bulk to retailers. Each sale is
:therefore for a fairly large amount of money and there are few sales to keep
:track of. Consequently the overhead in keeping the records is small.
:
:A retailer sells items individually to customers. The number of transactions
:is high, but the sale price of each transaction is lower. Each transaction
:needs a record, consequently the overhead in keeping the records is high.
:
:This overhead increases as the sale price decreases. Businesses which sell
:many small items - such as many small businesses do - will find it
:expensive to keep the necessary records.

I don't give a fuck about tax cheats, currently you need to keep a copy
of every transaction you make to have tax levied, hence the internal roll
of paper in a cash register, if you don't keep a note of every sale
how do you properly account your profits for tax purposes? For GST
you keep .85% and send the rest to John. Gee you are right, that
is so difficult. Ok, so you are used to going into milkbars and
just handing over some money, well guess what, they are cheating
on their tax, and it probably won't change under GST, they won't pay it
and they won't claim it back.

:Further, the cost of keeping the records will depend on the degree of
:computerisation. Large companies, with access to cheaper funds than small

Cash registers and the ability to multiply by 85 and divide by 100
for both the cost of inputs and sales is all that is required.

:businesses, can afford to install sophisticated systems to keep their
:records. Large companies also have the turnover to make such systems
:economic. Consequently the cost of keeping the necessary records will be
:lower for large companies than for small companies competing in the same
:marketplace.
:
:For these reasons, I can easily imagine that for many small businesses it
:will not be economic to keep the necessary records to claim the money back from
:the government. The cost of keeping the necessary records will outweigh the
:return. For many small businesses, if they do make claims on the government,
:it will only be by devaluing the cost of the owners time in keeping the records.
:
:Incidentally, the cost of installing the necessary accounting systems to keep
:track of the GST will not be a trivial cost. This cost should be bourne in
:mind when evaluating the costs and benefits of the GST.
:
:andrew waugh

Your initial premise was wrong so I won't bother commenting on each instance
of the same mistake.

Newsgroups: aus.politics