GST: Don’t tax the poor

Sense And Nonsense by Tan Bah Bah

Do we need to raise the GST?

Ah, you may be asking the wrong question. Or are we? “We are not raising the GST now but we are giving you notice that we will be raising it by two percentage points from 7 to 9 between 2021 and 2025 – with the final decision depending on the prevailing economic conditions”. So, what is the right question? Frankly, I am a bit stymied though I suspect it has everything to do with the next General Election.

Basically, Finance Minister Heng Swee Keat is saying: “We have done well economically. We have a $9.6 billion surplus. But a number of near-tectonic changes are already upon us, so we have to position ourselves well to deal with them. An ageing society is the most impactful of these and we have to find the money to take care of this very serious problem. We will do everything to stretch the dollar and be frugal so that we spend only what we earn and not burden the next and future generations with bills not incurred by them.”

Yes, indeed. And, as if on cue, up came Infrastructure cum Transport Minister Khaw Boon Wan with his Facebook declaration on Friday that the East Coast Integrated Depot, incorporating three MRT depots and one for buses, will save $2 billion of taxpayers’ money. That’s a lot of saving. If you ask me, whatever is spent on transport would be money well spent anyway as it helps Singaporeans get around for leisure or work without burning their pockets. Transport is also part of the social contract between government and people. Hence, kudos to Khaw. That was a smart taiji move.

Add to all this Prime Minister Lee Hsien Loong’s own Facebook description earlier on Tuesday of the budget as “a strategic and integrated financial plan to build us a better future together”.

While Singapore is on sound fiscal footing, the hike will allow the Government to plan ahead to ensure that “we can always afford to spend what we need”, he said, pointing out that government spending will rise, especially in healthcare, infrastructure and security.

Singaporeans can totally understand financial frugality as well as the soundness of having a whole-of-government approach to solving future problems.

The question is:  With cast-iron commonsense logic on its side, why has the government been so cautious, almost hedging, in announcing the GST hike?

The GST is always a potential political bomb. Anything to do with money in, to use the late Deputy Prime Minister S. Rajaratnam’s words, “moneytheistic” Singapore can be an effective tool for controlling social behaviour if it is fully understood and universally accepted. Fines work, so does the ERP.

But no one likes to pay taxes – whether you are rich, middle-class or poor. Yet, if you are wealthy, small hikes in taxes on everyday type consumption would be like water off your back. No big deal. If you are struggling or living from hand to mouth and are not in the income tax paying brackets and have to feel the pain because of the GST, however, any increase will have an impact: $1,000 a month expenditure suddenly becomes $1,020 a month, and that’s $240 more a year.

Do you then care about external threats, technological changes, demographic shifts, whole-of-government approach, the future economy? Unlikely.

But here’s the dilemma for people who wish to dive into the debate over the GST: Is the GST hike justified, given that we have a $9.6 billion surplus, the largest surplus in 30 years?

The government is careful not to fix the tax increase right now, preferring to wait till 2021 to 2015. It is biding its time, to assess the feedback and keep its options open on the timing. There is also plenty of opportunity to sell the hike to voters, with more softeners at its disposal along the way and nearer the next GE.

And the $9.6 billion surplus? This a double-edged sword for anyone who wants to exploit it. If you push the big surplus too hard, it can be touted as the result of good financial management – to be rechanneled as subsidies to help the deserving – and not be seen as a reason to oppose a GST hike. Should we rather have such a surplus than none, in the first place? Hard to counter that.

What then should critics of the GST hike focus on?

If you have to oppose, oppose it completely in principle on socialistic grounds– since any GST hike affects the lower-income much more than those who are better off. They should not be doubly penalised. Already suffering, they have no means to get out of their trap or overcome the extra burden beyond stretching out their hands for subsidies which would have to come from taxpayers elsewhere.

Look for the money elsewhere. Don’t tax the lower-income.

Sense And Nonsense is a weekly series. Tan Bah Bah is a former senior leader writer with The Straits Times. He was also managing editor of a local magazine publishing company.

55 COMMENTS

    • Take all articles from current and former agents of shittytimes with a pinch of salt. They worked for shittytimes because they fit the bill and were very adept at it.
      Their line of thoughts and arguments are very predictable due to the long time they had immersed in those environment of churning out propaganda. We have seen many of these making contributions to alternative media lately, faking some muted criticisms to confuse, sidetrack, manipulate and hoodwink the readers.

  1. Look here, they made a bad call and now wish too disengage form it. A change of Govt would help them clear all proceedings. Pushing us all to the edge as to help them. The enemy of my enemy is my Friend. This is the only way perhaps for Singapore to be out of its clutches. A strategy used to dissolve all previous agreements peacefully, like how Uncle Sam position it self in the TPP. They’ve been playing ball but to what end and they themselves knows this to be true. That’s the question right there. Can’t you all see it… Open ur eyes.. They can’t say that hey don’t vote for us right lol…

    • If any oppo party promises to lower GST rather than raise it, we will vote for it?

      Better still, we will vote for the party which promises to scrap GST completely. This will force PAP to not only scrap GST but even distribute more reserves to us. $100 – $300 per person is peanuts. Singapore has a lot of reserves, and we expect at least $300,000 per person! Not $100 – $300 per person!

    • If any oppo party promises to lower GST rather than raise it, we will vote for it?

      Better still, we will vote for the party which promises to scrap GST completely. This will force PAP to not only scrap GST but even distribute more reserves to us. $100 – $300 per person is peanuts.

      Singapore has a lot of reserves, and we expect at least $300,000 per person! Not $100 – $300 per person!

  2. Somehow the reason for raising tax is not well explained and justified. Worst is that they can forecast the taxation in 2021. But to inform us this decision before next election is a wonderful idea.

    • They announced it so those who can leave singapore can make preparations. Those who can’t, u be replaced by more 3rd world new citizens. To make your suffering less painful for NOW, we give u a 1 Time $300 for NOW.

    • AS I SAID, ROTTON PAP IS HINTING THAT IF DAFT SG CONTINUE TO VOTE FOR THEM IN THE NEXT GE AS SG GOVT AGAIN, DAFT SG ARE LITERALLY AGREEING TO GIVE ROTTON PAP THE MANDATE TO TAX MORE.

      SO, IF NOT AGREEABLE TO GIVE THE MANDATE, DON’T VOTE FOR THEM.

    • AS I SAID, ROTTON PAP IS HINTING THAT IF DAFT SG CONTINUE TO VOTE FOR THEM IN THE NEXT GE AS SG GOVT AGAIN, DAFT SG ARE LITERALLY AGREEING TO GIVE ROTTON PAP THE MANDATE TO TAX MORE.

      SO, IF NOT AGREEABLE TO GIVE THE MANDATE, DON’T VOTE FOR THEM.

      DON’T BE FOOLED BY WHAT ROTTON GOVT SAYS AND BY THEIR FIGURES AND STATS BECOS AS THEY HV “NO ACCOUNTABILITY” AND “NO TRANSPARENCY” AT ALL.

      FIGURES AND STATS ARE “SOCIALLY CONSTRUCTED” AND ARE UP TO THEM TO MANIPULATE.

      REMEMBER WHEN THARMAN WAS WORKING WITH MAS. AND THE SG ECONOMY AT THAT TIME “WAS NOT” GOOD AND THARMAN HAD COMMITTED THE “SECRET OFFICIAL ACT” AND CHARGED WITH FINES BECOS HE HAD LITERALLY LEAKED SOME ECONOMIC PAPER INFO TO EXTERNAL PEOPLE.

      SO, EVERSINCE, ROTTON PAP TIGHTENS ALL CRONY MINISTERS’ LIPS EVEN IF THE ECONOMY PERFORMANCE IS “NOT” FAVOURABLE, ROTTON GOVT WOULD STILL SAY IS GOOD.

      NEVER TRUST THEIR WORDS BUT TO TAKE IT AS A PINCH OF SALT!!

  3. Though the budget surplus has exceeded expectations is something that we should be happy about, the fact that the disparity is so wide compared to predictions proves that the ministry of finance together with the finance minister has no idea about budgeting and planning. Nothing to be excited about.

    • They are just being super kiasu. They rather under forecast collection and underspend than to take the slightest risk. In doing so, they make their lives very easy by making our lives harder

    • DON’T BE FOOLED BY WHAT ROTTON GOVT SAYS AND BY THEIR FIGURES AND STATS BECOS AS THEY HV “NO ACCOUNTABILITY” AND “NO TRANSPARENCY” AT ALL.

      FIGURES AND STATS ARE “SOCIALLY CONSTRUCTED” FIGURES AND ARE UP TO THEM TO MANIPULATE.

      REMEMBER DURING GCT’S REIN AS PM, THARMAN WAS WORKING WITH MAS. AND THE SG ECONOMY AT THAT TIME “WAS NOT” GOOD AND THARMAN HAD COMMITTED THE “SECRET OFFICIAL ACT” BECOS HE HAD LITERALLY LEAKED SOME ECONOMIC PAPER INFO TO SOME JOURNALIST.

      SO, ROTTON PAP TIGHTENS ALL CRONY MINISTERS’ LIPS EVEN IF THE ECONOMY PERFORMANCE IS “NOT” FAVOURABLE, ROTTON GOVT WOULD STILL SAY IS GOOD.

    • Nothing to be happy about the surplus. It just shows that they have collected more than it actually needs and stingy on social spending.
      They overspent lot’s of money on defense and on wayang propaganda. Why are we paying for the shopping space in Jewel and terminal for transient foreign workers to steal our jobs?

  4. In a few countries even around this region do not tax GST on medicine that the seniors need to buy. They can buy but restrited to one to two at any time and showing the senior identification card to buy.

    In some the consuming tax for the poor can claim relueve till a certain amount showing proof of purchases at every quarterly

    We are and living in a First World but do they know the percentage under an income of $2000

    I trust the people stands up to their frustration to vote in others and still keep the government on gheir toes

    Nothing in governments goes on forever. The Roman Empire through thd British empire went.

    • I am one of the those who go to polyclinics because it is cheap. The GST is always absorbed by the govt. Not just for medicine but also for consultation. The GST for the whole bill is waived (or absorbed).

      I have diabetes, and have to go every three to four months for my blood tests, to monitor my situation and get my medicine. The subsidy is quite high, and it does not really cost a lot to see a doctor in a polyclinic.

  5. Its not called hedging. Its called Lying. Coz the reserve kosong liao. All gambled away by that fugly man-woman hybrid creature called H Jinx. Of coz aided by her cancerous extraordinaire called Pinkie.

  6. Becos they want the “bad news” ahead of the wayang for GE. Planning for founding of Singapore celebrations and other social goodies. In order to strike as good as GE record. Maybe dampening impact of son coming into politics.

  7. 1. Is Singapore’s taxation stance in Budget18, an indication of reserve depletion?
    2. Are reserve depletion and escalating CPF restrictions, a reflection of the consequences of loses suffered by GICs and other local industries?

    Everyone knows that Singapore has lost its Midus Touch of the LKY era.
    The old economic sparks prioritized by the late LKY, is no more magic, as many other nations including once backward China have copied and emulated by inputting more relevant impetus into the modern-age economies.

    So it is at it’s own peril if Singapore continues with the old ways of doing things. Other commentators have proposed more in-sync policies to arrest the decline. In this world the only thing constant is Change.

    • Oh please stop your glorification of LKY ie “Midas” touch and all.

      There have been dumb economic errors of his government as well.

      This stupid argument of “If LKY had done it.. the outcome would not have been such” holds no water at all – u are making retrospective hypothetical assertions.

      • LKY is the root of current mess. Skyhigh salaries started from him. He installed and justified his own son to the throne.

  8. Alway say our is low than other never say because our minister salary is super high than other that why need to rise tax , world only Singapore first finance minister make plan for other new government whether they think PAP sure win again

  9. Why is there such a need to continue accumulating reserves when our reserves are already so large that they ran out of good investment target to place the reserves? Every dollar that goes into reserves is every dollar deprived to the citizens’ well-being and our country’s future development

  10. AS I SAID, ROTTON PAP IS HINTING THAT IF DAFT SG CONTINUE TO VOTE FOR THEM IN THE NEXT GE AS SG GOVT AGAIN, DAFT SG ARE LITERALLY AGREEING TO GIVE ROTTON PAP THE MANDATE TO TAX MORE.

    SO, IF NOT AGREEABLE TO GIVE THE MANDATE, DON’T VOTE FOR THEM.

    • REMEMBER I MENTIONED THAT JUST BEFORE SG BUDGET SPEECH ON MONDAY (19.2.18), I DISCOVERED THAT THE PLATE WHICH I HAD PLACED
      3 (REFERS TO USA) BANANAS ON IT HAD MUCH “LIQUID” (WEALTH)
      ON IT?

      STRANGELY, THE CENTRE ONE WAS STILL “HARD” (EXPENSIVE, DIFFICULT AND GENERAL OFFER) WHILE THE REMAINING
      TWO WERE “VERY RIPE” (IT’S RIGHT, USA WANTS ME).

      INDIAN ACTRESS SRI (3 – USA) DEVI (TAY, SIDE USA) DIED OF HEART ATTACK AT AGE 54.

      NO TIMOTHY GO. USA IS OPENING ITS JERUSALEM EMBASSY IN MAY.

  11. a gamblers will always finds a way/means to recover/recoup back what is lost at the table. Best is when the capitals need is easily gain from conning families,relatives and friends.

  12. The argument now is not just about the poor.
    Do not attempt to sway the argument.

    There is no justification in raising any GST when the government has their hands in squandering and getting CPF money cheaply.
    Getting CPF money cheaply is already a form of tax.
    Why are ministars still paying themselves billions? Spending generously on scholarships to foreigners? They are using your hard worked money to buy new votes for themselves.

    Before any talk about raising taxes, the greedy idiots should cut their salaries to earthly level first.

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