Wednesday, March 2, 2011

The Oppressive Goods and Services Tax (GST)

The well-heeled may take the 7% GST in their stride, but it is certainly a burden to the low-income group. It is so all-embracing there is hardly any service, government or otherwise, that one is exempt from paying GST. The Finance Minister claimed in his tendentious Parliamentary speech that the low-income group paying GST comprised the bottom 60 per cent of households which contribute just 16 per cent of Singapore's GST revenue. Be that as it may, the fact remains that they are burdened with the oppressive GST.

The Minister asserted that what the low-income group will receive from the Government budget pay-outs will more than offset what they pay in GST. How long can this largesse last and this low-income group will go back to square one once government's hand-out is exhausted. Can you imagine that if you go to a restaurant where there is no service charge or where the service charge is 5 per cent, you will find that you are faced with an absurd bill for GST which is more than the service charge?

The opposition MP Mr. Low Thia Khiang has hit the nail on the head when he asserted in Parliament that the Government uses the GST as a panacea to everything. However strenously the Finance Minister tried to dismiss it offhand, there is no denying that Mr. Low's assertion is viewed with credibility by a significant section of the electorate. And his proposal of a two per cent cut in the GST cannot be an election gimmick and is without doubt very popular with the population, citizens or non-citizens, rich and poor, and even PAP members and supporters. So how can a credible Government not pay heed to a popular wish of the population and continue obstinately to expect their approbation as a matter of course. Worst still, there are talks in town that to aggravate the people's burden, the PAP Government is going to raise the GST to 10 per cent after the general election.

Although the GST is not a major issue, it is significant enough for the opposition parties to highlight it in their hustings. The poorer section of the electorate will certainly be enamoured of the not illogical opposition arguments against the GST. Even the middle class and the rich will readily lend their ears to the opposition stand on this absorbing subject. The Government's stand on this issue has been expounded ad nauseam and there is unlikely to be any new line of argument in their defence.

Our country is Singapore and what other countries do with their GSTs are irrelevant because their polities are different and any comparison is untenable. The PAP Government is kiasu in thinking that acceptance of Mr.Low Thia Khiang's proposal of 2 per cent cut in the GST is conceding a political advantage to the opposition. The PAP will still be returned to power, perhaps with a reduced percentage, in the coming general election and the opposition parties will be able to capture one or two GRCs if they show unity. This is Singapore's political reality and no amount of political play will be able to change this chessboard.


Lenox said...

Let's say, reduce the GST. What do you propose to recover the lost of taxes in GST through which other means?

Singapore Recalcitrant said...

The tax revenue the government receives from the two casinos is more than enough to cover the two per cent cut in the GST

Chee Ken said...

Although the govt is correct to state that richer Singaporeans contribute most of the GST revenue, what they have always failed to prove is that the GST is used to "help the poor".

It's not as if GST is used to fund social programmes. Instead, it's used to beef up the govt coffers! So please stop the charade that the GST is to help the poor.

Are they saying that if GST was 0%, they would be forced to withdraw workfare, medifund, and public assistance? It can't be further from the truth, especially with a $47bn budget!

Singapore has more than enough money to do all that, even if GST was at 5%... After all, they had enough to return $4bn to the reserves and yet project a budget surplus.

none said...

Why must it always be on a who wins who loses basis? When GST was increased from 5% to 7% was the government concerned about how to recover the "loss" to the GST-payer?
Why ask this now question when the proposal is to lower the GST? Why can't a reduction in GST be simply considered as a step to help people in these difficult times when they are suffering from a surfeit of increases, as long as it is affordable?

Gary said...

Singaporeans have a problem with the govt - we have allowed it to do what it likes unquestioningly for far far too long. We failed to note the subtle difference between the different people centred vested interest during the time of the old guards like Goh Keng Swee and Hon Swee Sen and the greed-inspired, greed-motivated interest of the recent past and current govt.

We should have realised that something is SERIOUSLY WRONG when the govt ministers started to pay themselves obscene and astronomical salaries unheard of in the history of modern govt. That day really, in retrospect, marks the point of desperation the Lee family has reached. lky has run out of ideas, simply stated.

He is in his death throes, and Singaporeans are in mortal danger of being drag under by his desperate flailing to stay afloat. He is too aware that his pu yi-like son cannot prevail the moment he leaves the scene. IMO, at heart LHL has no ambition for the job. We as Singaporeans has nothing to thank him for for failing to stand up to his selfish old man.

Gary said...

To put it very crudely, the goodies given out to Singaporeans just before the GE can be likened to what a customer pays a prostitute to open her legs.

Gary said...

After the customer has finished with the prostitute, with what regard do you think he will still hold the prostitute? He will no doubt return again the next time round when he has an urgent urge to gratify again.

That seems to characterize the relationship that the ruling party likes to have with the people of Singapore.

Do Singaporeans want to be treated this way, again and again and again? I guarantee that they would continue to be as long as they continue to behave like the prostitute, willingly spreading her legs for the customer on each occasion for what must be to the latter a CHEAP price for the HUGE FAVOUR that she bestows on him in return again.

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