Saturday, September 10, 2011

GST : What can we do ?

Some said GST is good, some not.  The myth how we pay less tax and yet government can earn more money has already been answered.  But GST is coming regardless, so what can we do ?  If you haven't related the answer from "the prefect world" article yet, then may be this article may help ...

Everyone who wants to adapt to GST need to produce REAL values to the people by large around his society.

In business we will need to sell something that people really need instead of just manipulating and deceiving the market.  When you provide what people really need, GST actually helps you reduce cost, hence your profit goes up without even raising your selling price.  If you are too creative in what you are selling, you will have to increase your price to keep what you are earning now when GST comes.  You will have to harvest more money from the public without giving them any extra values.  You just provide value with the few parties you make deal with, just like the primary school friend of the fisherman story.

In addition to that, you should create your own merchandise or at least shorten the distribution channel as much as possible ie. import the goods yourself.  Before GST, importing the goods yourself may mean extra profits but with GST in place, importing directly is essential for survival.  The best is to 'produce' your own goods.  For example, I buy seeds and soil to grow my own papaya which is extra juicy naturally.  The seeds and soil may be the same as all my competitors but 'the way' I grow my papaya is unique.  If general public like that, I have created value directly.  GST will be in favour of me in this case.  This is significantly different than the typical trading business ie. I bought a papaya from central market and sell it in my village.

If you are just having a job, then there is less you can do to combat with GST.  In short, GST will still drive inflation up and your 'saving' will have a higher return target (saving return should be higher than inflation).  If you don't think your next few years job earning can increase 4-6% annually, then this is the time you seriously think what real values you can produce for the people around you;  be it still within the job market or starting your own business.

If all of us are creating values for each other, implementation of GST will be in favour of us.  We should all seriously think about that and start making something of our own be it making cloth, growing food, making shelters or transport.

Creating a self sustain eco system within yourself will seal yourself from any negative effect of GST.  This can be done in a small way, ie, within your families, friends or just neighbours and villages.

Consuming wise, if you see price hike due to GST without any additional values, you should now very well aware that it is because that business is NOT well managed or there are some cronyism within that business.

So what value are you going to add to your community to seal yourself from GST ?  Or will you just sit through complaining about this one as well ?

This article was suppose to be read in this sequence.