Posted by EngineeringProfit > 1 month ago | Report Abuse

GST, as a flat consumption tax, tends to place a heavier burden on low-income households because they spend a larger share of their income on taxed goods and services compared to wealthier households. This makes GST regressive in nature, contributing to increased financial strain on poorer families and exacerbating income inequality. While measures like exempting essential goods or providing rebates can mitigate some of the effects, GST remains a tax system that disproportionately affects those with less disposable income. In many cases, wealthier households spend more on services like financial management, travel, or luxury goods that may be exempt from GST or taxed at a lower rate. Low-income households, on the other hand, focus their spending on everyday items, which are more likely to be fully taxed.