Manpower Minister Tan See Leng took issue with the Workers’ Party’s proposed alternatives to the GST hike, and said in Parliament on Tuesday (Mar 1) during the Budget debate that they would just “squeeze anyone who does well”.
WP chief and Leader of the Opposition Pritam Singh had said on Feb 28 that the party disagrees with the increase in the Goods and Services Tax, set to take effect on Jan 1, 2023, and would object to its inclusion in Budget 2022.
Among the alternatives proposed by WP is the proposed increase in corporate and wealth taxes presented by Sengkang GRC MP Jamus Lim, an ecocnomics professor.
Dr Tan said it would not be possible to impose “extremely punitive” taxes on the top 1 per cent or 5 per cent of wage earners in order to gain the same amount that would result from increasing the GST.
“We will, as a consequence, have to increasingly shift and raise the tax burden onto the middle class,” the minister said. This, he said, would affect upper-middle and middle income earners as they would need to pay more taxes as well.
”And that, I believe, is the surest way to unravel and destroy our social compact and trust in our society, and Singapore will not hold together.” added Dr Tan.
He further said that the WP’s proposals would “ultimately result in a system where our approach to revenue is just to squeeze anyone who does well, from the middle-income upwards, potentially.
In response, Mr Singh said he disagreed with Dr Tan’s characterisation of WP’s proposals, which he said were proposed “in the spirit of seeking a more equitable tax distribution amongst various segments of society”.
“The point of our suggestions really is a more equitable load,” he added.
“You’ve cherry-picked some and criticised them. I think you’re entitled to, but if you look at the proposals holistically, you would understand that the Workers’ Party has put up alternatives for a rise in GST,” said Mr Singh.
He added that the thrust of the alternatives the WP proposed is to obtain balance “in a manner which is more equitable for society going forward for a fairer, more sustainable and more inclusive society.”
Prof Lim also rejected the Manpower Minister’s characterization of WP’s alternatives, pointing out that only one “lever” among the four the WP proposed involved wealth taxes.
Denying that the WP is “seeking a very narrow tax base,” he reiterated that the party is “in fact seeking alternative revenue levers that subscribe to the general principles of public finance – which are, as much as possible, to spread the revenue schemes in as broad a manner as possible, but at the same time .. have a certain degree of fairness and equity.”
/TISG
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