Tuesday, November 14, 2006
@11:37 AM
GST of 7%?Since I am doing the course in "Economic Development in Asia (EDA)" this term, I am particularly keen on this topic of GST hike. In fact, just 2 weeks ago in class, I asked the professor what exactly is a "safety net" since we have none in Singapore. No doubt, he was equally surprised that there isn't one in a developed nation like Singapore. See, I am not advocating for a safety net like the ones in European nations. We will never have those as long as PAP is in control. Singapore's style has always been "help them them themselves", which I buy. So settled my first point - Safety net is important in developed nations.
Maybe it's coincide that I am learning more about the implication of "widening of income gap" under EDA as well. The government admitted that there's a widening of income gap in Singapore. Household income rose 4 per cent a year for the top 20 per cent but only 0.3 per cent for the bottom quintile. So this point brings me back to my 1st point that safety net is important. If the government doesn't care about this lagging group, you guys will instead complained that government is cold-blooded. Right?
Now, if the government wants to create this safety net for the
really poor, where can the government get the money? The primary source of revenue for the government has to be tax. Can we raise income tax or corporate tax? No, that will undermine the competitiveness of Singapore. In fact, the government is proposing a cut in these 2 taxes (which I buy as well). How then can the government get the revenue? Through indirect tax such as GST, of course. This hike will hit the better-to-do groups, rather than the really poor. You have to appreciate the difference between direct tax and indirect tax in order to understand why a hike in GST isn't that bad after all.
If this hike is meant to provide more for the
really poor, I definitely have no complaint. Assistance in education fees, medical fees, skill upgrading fees, and housing costs will cost the government outflow of cash. So while we are taxed more while we are pampering ourselves on luxury goods, lets remind ourselves that these taxes will end up assisting those whom we have left behind in the society. If you are shopping every weekend, please don't classify yourself as poor. And don't complain.
But of course, I hope the government will really carry out the plans........
by Str|fe
2 comments
