Goods and Service Tax (GST)

The Goods and Service Tax (GST) is a tax levied on domestically-bought products, whether that be basic groceries or expensive cars. While it is a tax that is paid for by the consumer,rnits main purpose is to generate revenue for the government since they are the ones levying the tax against the product. This entire process takes place under the umbrella of domestic consumption. For the consumer, when buying the product that they have chosen, they are not only paying for the price it cost to make the product, as well as the added price put on it by the seller, but the GST is also included in the price upon the point of purchase. From that transaction, the GST revenue is in the hands of the seller, who then becomes the middleman that transfers the tax to the government. This tax is a common one, being as countries ranging from India to the United Kingdom implement it within their markets. France was the first country to implement the GST in 1954, and since then nearly 160 countries have made use of the GST system. Some of the countries with a GST include Australia, Canada, Italy, Nigeria, Monaco, Spain, Brazil, and South Korea. While not all countries have the same value when it comes to their GST, it is common for there to be a single tax rate across the board in each individual country. This single tax combines central taxes (e.g. sales tax, excise duty tax, and service tax) with state-level taxes (e.g. entertainment tax, entry tax, transfer tax, sin tax, and luxury tax) onto a single GST platform, making it simpler for both the seller and the consumer. While the U.S. doesn’t implement a GST system, our tax system can be difficult to navigate. We all know that taxes and tax planning can get complicated, which is why it’s important to find a good partner for the process. We recommend working with the professionals at EP Wealth Advisors to help with your tax plan.