GST Hike Could be Next on the Cards for Gahmen to Increase Revenue

Posted on Mar 8 2017 - 6:15pm by Redwire Singapore

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With hikes in water, S&CC, rubbish collection, electricity, parking, ERP and more coming at us all at once, could Singaporeans be made to face an increase in Goods and Service Tax too?

This is what National Development Minister Lawrence Wong had to say when quizzed in parliament by Workers’ Party for Aljunied GRC MP Low Thia Khiang.

From highlighted portions of Mr Wong’s reply, it appears that the government is open to increasing the current 7 percent GST.

So, it seems like a matter of “when” rather than “will it will happen”:

Mr Low: Will the Government raise GST before the end of this decade? Does the minister agree that GST vouchers do not fully offset the amount of GST paid by lower-income households?

Mr Wong: As the Finance Minister said, we are studying all revenue options. Let’s not jump to the conclusion of which particular tax is going to be increased or when. The point is that we are preparing ahead, and we’re studying and keeping our options open at this time. GST is a progressive tax, the way we have designed it. It’s not a question of whether its offsets are sufficient to cover everything that the low income has to pay – but it’s the overall progressivity of the system. And the way we have designed the GST with a permanent voucher is to make it a progressive consumption tax.

We have had many debates in this House about this particular design feature of our GST system. More fundamentally, on this issue we have to ask ourselves, and I think, ask Mr Low, these two questions.

First, despite our best efforts to be prudent in spending, do we agree that our long-term expenditures are going to go up, particularly in areas like healthcare with a population that is ageing rapidly? And with huge infrastructure requirements that we do need to put in place to prevent our basic infrastructure from deteriorating and decaying, do we agree that these long-term expenditures are going to go up?

Second, if we agree that long- term expenditures are going to go up, is it not proper and responsible and prudent for the Government to start thinking ahead of what these expenditure needs are, and preparing for all options and studying the revenue options that we need to prepare for this eventuality?

Mr Low: Are there other forms of revenue that we can look at, for instance, revenue from land sales which my colleague spoke of during the Budget debate?

Mr Wong: I believe the Finance Minister had explained that land sales revenues go into our past reserves. So unless the Workers’ Party would like the Government to use past reserves, then this option is not going to be made available.

 

 

1 Comment so far. Feel free to join this conversation.

  1. vbhnji March 18, 2017 at 7:47 am - Reply

    Sweet talk with you fake promises, voted and win again. Then screwing you deep after that, this is what GE all about.

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