Read from official source: How raising GST can help the poor!

[cooleo]

http://www.mof.gov.sg/budget_2007/gst.html#Q3



Frequently Asked Questions on the proposed increase in GST
from 5% to 7%

Questions on overall need to increase GST
Q1: Is it necessary to increase GST? Can't the Government cut back its spending or find other sources of funds?
Q2: Why must the Government increase GST now when our spending needs are only in the future?

Questions by Individuals
Q3: It is unclear as to why the Government has to "tax the poor to help the poor". If it is indeed the Government's aim to help the lower-income, why not exempt basic goods and services and impose a higher rate of GST for luxury items?
Q4: Can't GST be waived for medical treatment?
Questions by Businesses
Q5: Will the increase in GST hurt small businesses more than the big ones?
Q6: How is the Government guarding against profiteering and inflation arising from the increase in GST?
Q7: Where can I get information about the Goods and Services Tax?
Feedback Channels
Q8: What are the feedback channels for me to express my views and ideas relating to Budget 2007 or the GST increase?


Questions on overall need to increase GST

Q1: Is it necessary to increase GST? Can't the Government cut back its spending or find other sources of funds?
A1: There is very little scope to cut back further on Government spending. Indeed, we have already reduced Government spending from about 18% of GDP in 2001 to about 14-15% of GDP currently. At this level, we are already operating one of the leanest governments in the world. If anything, we will need to spend more going forward - to help the lower-income and to prepare for an ageing population, while continuing to invest for our future. Government spending over the next 5 to 10 years will have to go up by at least 1% of GDP. At the same time, the scope for increasing revenues is limited. Our largest sources of revenue are personal and corporate income taxes - which we cannot afford to increase further because it would affect our ability to attract talents and investments in a keenly competitive global environment.

Q2: Why must the Government increase GST now when our spending needs are only in the future?
A2: To invest for the future, we would need to start spending now. We are using the GST money to invest in the future, so that all Singaporeans enjoy better growth and will be better off because of the investments we make now. We are not increasing GST now simply to give it all back, redistributed.

There are immediate needs to invest in education, R&D, infrastructure for a leading global city, and first class living environment. Programmes to provide more for the lower-income and the elderly are also pressing.

There is never a good time to increase taxes. But it is better to increase the GST now when the economy is doing well and job prospects are good. It will also allow the Government to ease the transition to a higher GST rate for our citizens by providing an offset package. If we wait till the bulk of our spending needs are upon us before raising GST, the budget will be too tight and we will not be able to provide any assistance to help Singaporeans transit to a higher GST rate.

Q3: It is unclear as to why the Government has to “tax the poor to help the poor”. If it is indeed the Government’s aim to help the lower-income, why not exempt basic goods and services and impose a higher rate of GST for luxury items?

A3: Exempting basic necessities like rice from GST is not the best way to help poorer Singaporeans. GST exemption on basic necessities will benefit higher-income households more than the middle- and lower-income groups, as the higher-income consume more of everything in absolute terms. It is preferable that we keep the tax flat so that its rate can be kept low and the system simple to administer. With a flat tax on all goods and services, the Government will be able to harness the additional revenue to help the lower-income to the extent that they will be better off than without the GST increase.

 

[SneeringTree]

http://www.mof.gov.sg/budget_2007/gst.html#Q3


Q3: It is unclear as to why the Government has to “tax the poor to help the poor”. If it is indeed the Government’s aim to help the lower-income, why not exempt basic goods and services and impose a higher rate of GST for luxury items?

A3: Exempting basic necessities like rice from GST is not the best way to help poorer Singaporeans. GST exemption on basic necessities will benefit higher-income households more than the middle- and lower-income groups, as the higher-income consume more of everything in absolute terms.

Load of crap. Higher income people are not going to buy your NTUC housebrand, much less buy more of it. We are talking about BASIC necessities. Not wine or balsamic vinegar!

 

[po2wq]

...

A3: ... GST exemption on basic necessities will benefit higher-income households more than the middle- and lower-income groups, as the higher-income consume more of everything in absolute terms. ....

ya ...

higher-income eat mor rice n bread than lower-income gps ...

 

[wrcboi]

i wish they would increase the gst to 20% or best 30%......sg people have to learn it the hard way...maybe even 40% they still cant be bothered or dont care

 

[Unrepented]

An upfront rebate or periodic cash rebate to the needy would be more feasible. In a nut shell, recycle the revenue collected from households and give it back to end users of necessities. So that they will have cash in hand to spend and pay for GST.

If no gst is charged on rice for example, operators in the food industry may still charge high prices i.e. cooked food stall in hawker centers, etc. Lost of revenue for the government, less to invest for the welfare for the citizens. Rich businessmen pockets them and bye bye.

But "Operating one of the leanest government in the world", what facts and figures to substantiate? And at what level of service and quality are we comparing against? Hope more learned members can help clarify.

 

[singaporean_boy]

[/URL][/IMG]

http://sporesays.blogspot.com

 

[Papsmearer]

http://www.mof.gov.sg/budget_2007/gst.html#Q3




Questions on overall need to increase GST

Q1: Is it necessary to increase GST? Can't the Government cut back its spending or find other sources of funds?
A1: There is very little scope to cut back further on Government spending. Indeed, we have already reduced Government spending from about 18% of GDP in 2001 to about 14-15% of GDP currently. At this level, we are already operating one of the leanest governments in the world. If anything, we will need to spend more going forward - to help the lower-income and to prepare for an ageing population, while continuing to invest for our future. Government spending over the next 5 to 10 years will have to go up by at least 1% of GDP. At the same time, the scope for increasing revenues is limited. Our largest sources of revenue are personal and corporate income taxes - which we cannot afford to increase further because it would affect our ability to attract talents and investments in a keenly competitive global environment.

Lying piece of shit PAP. There is a lot of scope for cutbacks. For example, politician salaries and top civil servant salaries. I am sure they can save $50-$100 million if they pay themselves in accordance with other world politicians. MOF likes to peg the Sin $ to the USD, why dun they peg the politician salary to the US politicians? Another area is the defebce budget. Why is there a need to spend $billions on stealth frigates, F-15s, etc. They can easily cut $2 billion from the defence budget. How can they say they are lean when the defence budget is alone is over 5% of GDP. They are so called lean because they do not provide many of the services that other first world countries provide, such as healthcare, social benefits, retirement benefits, etc.

Q2: Why must the Government increase GST now when our spending needs are only in the future?
A2: To invest for the future, we would need to start spending now. We are using the GST money to invest in the future, so that all Singaporeans enjoy better growth and will be better off because of the investments we make now. We are not increasing GST now simply to give it all back, redistributed.

There are immediate needs to invest in education, R&D, infrastructure for a leading global city, and first class living environment. Programmes to provide more for the lower-income and the elderly are also pressing.

There is never a good time to increase taxes. But it is better to increase the GST now when the economy is doing well and job prospects are good. It will also allow the Government to ease the transition to a higher GST rate for our citizens by providing an offset package. If we wait till the bulk of our spending needs are upon us before raising GST, the budget will be too tight and we will not be able to provide any assistance to help Singaporeans transit to a higher GST rate.

They are not redistributing it or investing in any thing when the 2 companies owned by MOF Temasek and GIC are losing $billions. They have only invested it in money losing western banks and property companies. Hardly a successful strategy.

Q3: It is unclear as to why the Government has to “tax the poor to help the poor”. If it is indeed the Government’s aim to help the lower-income, why not exempt basic goods and services and impose a higher rate of GST for luxury items?

A3: Exempting basic necessities like rice from GST is not the best way to help poorer Singaporeans. GST exemption on basic necessities will benefit higher-income households more than the middle- and lower-income groups, as the higher-income consume more of everything in absolute terms. It is preferable that we keep the tax flat so that its rate can be kept low and the system simple to administer. With a flat tax on all goods and services, the Government will be able to harness the additional revenue to help the lower-income to the extent that they will be better off than without the GST increase.

Why will GST exemption on basic necessities benefit higher income households more than others? I don't undertstand this. A rich household of 4 will consume essentially the same amount of rice as a poor household of 4. Same for cooking oil, salt, sugar, etc. A rich household might consume more lobster or abalone, but this will be under luxury item. what kind of fucked up logic do they have over at MOF. Is it a wonder why this country is going to the dogs?

 

[phouse3]

The government achieved a budget surplus of $6.4 billion in 2008 after they have increased GST from 5% to 7%. The money is probably transferred to employers under the Job Credit Scheme and others.

Now they are going to spend $1.1 billion per year on productivity growth totalling $5.5 billion over 5 years. Again the money goes to the employers.

The usual Trojan Horse argument is that the people benefit from gainful employment.

So increasing foreign worker levies on the employers to re-coup back some money rather than raising GST is acceptable. Arguing for the total removal of levies is not acceptable.

 

[SneeringTree]

Why will GST exemption on basic necessities benefit higher income households more than others? I don't undertstand this. A rich household of 4 will consume essentially the same amount of rice as a poor household of 4. Same for cooking oil, salt, sugar, etc. A rich household might consume more lobster or abalone, but this will be under luxury item. what kind of fucked up logic do they have over at MOF. Is it a wonder why this country is going to the dogs?

In fact I will go further to say that, higher income households actually consume *less* essentials.

 

[Rogue Trader]

In fact I will go further to say that, higher income households actually consume *less* essentials.

yes. consumption habit also changes for different income groups. those with more disposable income tend to eat out rather than at home. then they will be subjected to Gst, service tax and cess. this increase Gst to help the poor arguement holds no water.
I wonder why didn't the opposition grill the decision in parliament when it was announced.

 

[cheekenpie]

Oppostion also know that gst tekans everbody.

Poor suffer cos they buy more essentials

Rich "suffer" because they buy more discretionaries.

Discretionary cost more so get more from gst tax.