Lower GST registration threshold will hurt small businesses

I read the proposals by Ernst & Young with concern ("EY urges Govt to sharpen some tax policies"; Thursday).

I object to the proposal to lower the threshold for goods and services tax (GST) registration to $500,000.

This is not a large sum for businesses. It translates to only $41,666 a month or $1,369 a day.

Many small and medium-sized enterprises will end up meeting this threshold limit - including small business owners who do not have the necessary capacity or resources to handle GST compliance matters.

They would then have to juggle GST compliance with day-to-day business activities and long-term strategic planning in their efforts to keep the start-up afloat.

Many small businesses are also owned by the elderly who have little or no knowledge of IT.

Businesses such as sundry shops, hawkers and medical halls are often within our HDB heartland, and owners do not want to deal with the hassles of GST compliance matters, which are fraught with difficulties.

Therefore, the GST threshold should be maintained at $1 million.

Wilson Loo Kok Wee

A version of this article appeared in the print edition of The Straits Times on February 13, 2016, with the headline 'Lower GST registration threshold will hurt small businesses'. Print Edition | Subscribe