GST to be raised to 7%
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Those poor ppl means nothing compare to the peanut.
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peanut > HogzillaOriginally posted by T.Ryousuke:Those poor ppl means nothing compare to the peanut. -
You are right!Originally posted by ndmmxiaomayi:It will change - to increase the GST again, so as to cover up the losses when citizens don't spend.
Let's spend lesser than before!!! Sell away your car if you think that is not a necessity.
If many people think wisely....I bet at least one quarter of our car population will be gone.
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sammyboy forum
From: LeongSzeHian 14-Nov 09:05
To: ALL 5 of 13
123886.5 in reply to 123886.4
The Prime Minister announced in Parliament on 13 November that the Goods and Services Tax (GST) may be increased to 7 percent, up from 5 percent presently.
Mr Lee said the hike is necessary to finance the enhanced social safety nets, which are needed to help the lower income group. There are plans to increase the grant to the needy to buy their first home, as well as to give them more "workfare" bonuses as an incentive to stay employed, and it will come with a package which will more than offset its impact on the poor.
Since May, there has been increases in chronological order, electricity, taxi fares, electronic road pricing (ERP), food and beverage prices due to the higher rentals of upgraded food centres, university fees, development charge for non-landed residential sites, bus and MRT fares, HDB 1-room and 2-room rentals, etc.
GST is a regressive tax because it generally affects the lower-income more than the higher-income. As income tax rates have been reduced gradually since the introduction of GST, the higher-income has also in a sense benefited more on a relative basis. Instead of just increasing GST, I would like to suggest that we explore the possibility of taxing the higher-income more, as well as other cost-cutting measures like reducing the number of scholarships for foreigners. We could also consider waiving GST for basic necessities like food, utilities, public transport, medical fees, etc, like some other countries.
Past experience indicates that most businesses may just pass on the GST increase to consumers, often times disproportionately more than the actual increase.
"A package which will more than offset its impact on the poor" may lead to those who are marginally above the poverty level to be in a way "squeezed more" in relative terms.
Our experience with the New Singapore Shares (NSS), Economic Restructuring Shares (ERS), etc, has shown us that there may be leakages in the system in that tens of thousands may not get the help that was designed to help them most, because they failed to register by the datelines imposed.
Increasing GST may also affect Singapore's competitiveness internationally, as our current costs are already much higher that our neighbouring countries.
I suggest that a comprehensive study and review be conducted to examine the extent to which GST and its increases, may have contributed to the widening income gap. In so doing, we may avoid the fine balance of increasing the probable cause of the problem which we are trying to address, which may further aggravate the problem. This is reflected in the Department of Statistics' (DOS) General Household Survey 2005 (GHS) that about 40 per cent of households had declining incomes (inclusive of the bottom 10 per cent of households which had no income from work, presumably most of which are retiree households) after adjusting for inflation from 2000 to 2005, and the DOS Household Expenditure Survey 2003's (HES) data that about 40 per cent of households had a deficit in their monthly income-expenditure.
We could also try to explore other resources that Singapore has to help the poor, such as our US$132 (S$205) billion foreign reserves which has been ranked number one in the world on a per capita basis. According to the International Monetary Fund (IMF) World Economic Outlook Database September 2006, Singapore is ranked number one in the world for current account balance in percent of Gross Domestic Product (GDP) ratio. Singapore's ratio of 28.5 in 2006, is more than double the second ranked country, Switzerland's ratio of 13.3.
I believe the additional revenue from the two per cent GST increase is estimated to be less than $2 billion. This year, Temasek's paper losses in Shin Corp is already estimated to be over $1 billion and SingTel's SingTel Optus estimated expected write-down is about $8 billion. We could try to re-examine how our Government-linked Companies (GLCs) invest, particularly overseas, with a view to learning from the experience and the lessons, so that in future,we do not in just one year, have a paper loss that may be more than four times the annual increase in revenue from the GST increase.
The Government Investment Corporation (GIC) had returns of 8.2 per cent per annum for the last 25 years, and Temasek had returns of 18 per cent per annum for the last 32 years. With about $205 billion of foreign reserves, if just one per cent of the GIC and temasek's average annual returns is used to help the needy, there may be no need to increase GST, or a lower increase.
As to "plans to increase the grant to the needy to buy their first home", the lower-income may generally have a higher probability of encountering financial difficulty at some point in a typical 30-year mortgage, and thus risk losing their homes and CPF.
Some of the measures to help the needy, may unintentionally end up creating other problems for them.
Leong Sze Hian
correct! why can't the govt use just 1% of GIC and temasek's average annual returns to help the needy instead of increasing the GST? -
Because they are lugi-ing money instead, so need to bleed us more to cover up all the losses.Originally posted by lotus999:correct! why can't the govt use just 1% of GIC and temasek's average annual returns to help the needy instead of increasing the GST? -
I say again.
If the government's brilliant schemes to help the poor were good or effective, then why are there reports every year that the income gap is widening between the poor and the rich?
Why?
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Why? I tell you our PM's reason (I use "reason" because I think also lan lan).Originally posted by charlize:I say again.
If the government's brilliant schemes to help the poor were good or effective, then why are there reports every year that the income gap is widening between the poor and the rich?
Why?
He said that, income gap widening is a global issue, Singapore cannot cut itself out of this globalisation trend.
He also use the same excuse (I use "excuse" because if this is a "reason", it is a severly flawed reason) for GST increament.
But wait!! He said that when China and India development catched up with Singapore, then Singapore will try it's way to increase it's business cost to operate in Singapore. So this is the globalisation trend.
But as income gap widening is a global issue, the world is not only consist of developed countries, Singapore, China and India right? So when China and India caught up, there is bound to have other countries in the lower income range, right? Singapore also have to compete with these countries in terms of operation cost in the future. if that is the case, do we need to decrease co-operate tax to such a rate so that we can compete with these countries then? We need to deal with all the government operation cost as well, does that means an increament to any regressive tax too? -
Dear All
The Saga of the GST Hike continues. The press is unrelentingly offering support to the PAP GovernmentÂ’s initiative. Over here, i wage a war against one-sided information and skewed perspectives. This is my letter in response to Article at Page 6 Sunday Times yesterday 19th November 2006.
Regards
Ti Lik
GST Hike Propaganda
The article at page 6 of Sunday Times 19th November 2006 by Ken Kwek is referred to.
Lending support to the Government’s GST hike gig, the article reveals that Mika Sampovaara, a Scandinavian quitter is able to – earn the same and have more time for a better life in Singapore by fleeing from the heavy taxation levied by a welfare state. These are some points to put the article in proper perspective.
1. The Scandinavian quitter was a high-flying economist, stock analyst and broker in his own country. He was placed at the top income tax bracket of 60% taxation rate - in short the Viking was part of their elite!
2. The average Singaporean will never earn close to the Scandinavian elite. This then begets the question of whether this example of a Scandinavian quitter has any relevance to the situation faced by the people of Singapore.
The article simply validates our suspicions that Singapore is fast becoming a haven for elite foreign quitters. This certainly was not what Singaporean voters wanted when they voted for the ruling party in the recent elections.
The elite Scandinavian quitter feels he has more than repaid his country (which he benefited from under the welfare system) just because he has paid 5 years of income tax at 60%.
How should the average Singaporean feel in having to stay and continue to pay 7% for all consumption for their entire lifetime here where in a non-welfare state?
Proportionately, the average Singaporean will pay far more than the elite Scandinavian quitter. As this means Singaporeans are more meek and compliant than our imported talent. The Government ought to rethink its obsession with flooding Singapore with foreign quitters.
In any event, if citizensÂ’ fleeing their country for greener pastures is any form of measure SingaporeÂ’s administration would fail dismally, by this yardstick, in comparison to FinlandÂ’s.
For once, someone must get the message across into the thick skulls of the leadership that when Singaporeans ask the Government for a social safety net, we do not mean the Scandinavian model of welfare assistance. Singaporeans are too meek to make demands, Singaporeans would be too happy if the government were less greedy i.e. take less & spend less.
The PAP government should cease using the Scandinavian welfare bogeyman to frighten Singaporeans into accepting their twisted logic for further increases to their costs of living.
The fault in SingaporeÂ’s system is that the prevalent and uncritical support of the Ruling party empowers it to push through detrimental, unpopular and illogical policies, which hurt all Singaporeans including their supporters, a result of the arrogance leading to high-handedness and a lack of compassion for the people.
SingaporeÂ’s problems cannot be solved by this theatric GST hike and its supporting accompaniment because:-
1. Increasing consumption tax hurts the poorest people hardest and only serves to widen the income gap. This must be avoided.
2. all help schemes, however well intentioned, require resources to administer its disbursements and therefore are inherently inefficient and inevitably waste public resources. This is worse when the criteria make it difficult for the needy to qualify.
3. if the Government is really sincere about helping the masses, it can do more to lower the cost of living and certainly not continue to act to make it worse.
4. the Government should raise resources by cutting wastage and lavishness in its own administration. This will come across as being more resourceful. Simply raising tax indicates having lesser abilities.
The elite in Scandinavia are made to bear the heaviest burden – rightfully so. Singapore’s masses are on their way to bearing the bulk of the nation’s burden if they do not indicate their displeasure to the PAP in no uncertain terms at the next general election.
The challenge of administering a country is one of the highest calling and it does not augur well if the attitude of the PAP Government is to race others to the bottom.
Until the next general election, this 1st World Government still has opportunities to prove its worth (and cost) by producing policies which better the lives of the Singapore people.
Singapore will be better off without the GST Hike.
Chia Ti Lik -
PEANUT = GOHZILLAOriginally posted by Hogzilla:peanut > Hogzilla -
Before election, we have progress package. After election is the GST increment. For every cause, there is an effect.
This is the Newton's 3rd law of motion. -
NOTE: Compare Associate Press Coverage with Asiaone's own coverage - spins on the positive note although both covered similar content...! Interesting. ...
[ Asiaone's headline:]
Singapore's growth raised to 7.5 % to 8% for 2006
The upward revision from the earlier forecast of 6.5 to 7.5 per cent is on the back of continuing economic improvement, even though the economy grew at an annual rate of 5.7 per cent in Q3, below expectations.
[end]
Does this mean that the GST increase rationale is bunk? I.e. GST shouldn't be increased now that we are slowing again. Also note the widening of income gap in the last para...
[Associate Press headline]
Latest News from AP.
Nov. 20, 2006, 5:18AM
Singapore's Economic Growth Slows
© 2006 The Associated Press
SINGAPORE — Singapore's economy grew 7.2 percent in the third quarter from a year ago, slower its 8.2 percent growth rate in the previous quarter, according to government figures released Monday.
The Ministry of Trade and Industry raised its growth projection for the full year to 7.5 percent-8.0 percent from an earlier 6.5 percent-7.5 percent, but said that a global economic slowdown posed risks for the city-state.
Singapore's fortunes are closely tied to the global economy with exports amounting to about one-and-a-half times its 200 billion Singapore dollar gross domestic product. Government concerns that a global slowdown will crimp growth in the future could signal tougher times for other countries in Southeast Asia.
"Overall the economic outlook remains benign, but there are several downside risks," the Ministry of Trade and Industry said in a statement. These include implications of a sharp slowdown in the U.S. housing market, a rise in semiconductor inventories and still-high oil prices.
In 2007, it projects the economy to grow between 4.0 percent and 6.0 percent.
"The rapid expansion in China and India are expected to ease slightly due to slower export growth and the impact of higher interest rates," it said.
Singapore's manufacturing sector expanded by 10.6 percent on year in the third quarter, down from 12.7 percent in the previous quarter due to slower growth in the electronics, biomedical and chemicals sectors. Services gained 6.5 percent after expanding by 7.0 percent in the April-June period.
Meanwhile, a labor department official said Singapore's income gap would continue to widen due to pressures linked to globalization.
Wages among the highest-paid professionals were rising, while wages for people in the lower-income sectors were flat, said Jeffrey Wong, divisional director of Manpower Planning and Policy Division, Ministry of Manpower.
The comments follow a recent announcement by Prime Minister Lee Hsien Loong that Singapore would raise its sales tax from 5 percent to 7 percent next year, and simultaneously introduce a packaged designed to help low-income Singaporeans.
Between 2000 and 2005, incomes in the wealthiest Singapore households increased at a 2.8 percent annual rate, while they declined in the poorest households, according to the government's most recent survey. -
The progress package takes up 2.6 billion of Singapore Government's coffer, but the hike in living cost (ie. bus fare increment, GST, power tariff and a lot more) can get back a lot more than 2.6 billion.Originally posted by HyuugaNeji:Before election, we have progress package. After election is the GST increment. For every cause, there is an effect.
This is the Newton's 3rd law of motion.
Newton's 3rd law of motion (All forces occur in pairs, and these two forces are equal in magnitude and opposite in direction.) does not apply here. The cause is too little, while the effect is too great. -
Target:
1 Million Signatures!
http://www.petitiononline.com/GST7/petition.html
http://www.gsthike.com/index.php
Enough is enough!
Singaporeans MUST learn to stand up against the Familee's tyranny and economic genocide against Singaporeans! Even if it's not for ourselves, we have to do it for our children and children's children!
If Singaporeans don't want to help themselves, nobody will!
Please urge at least 5 or more of your relatives, friends and colleagues to sign in. Just do it!
The key to the petition success is to publicize it!
If 100 Singaporeans can send out 5 or more emails to their relatives, friends and colleagues to sign the petitions, and half of them do so, and so on, one can imagine the exponentially multiplying effect:
100, 0.5*5*100, (0.5*5)^2*100, (0.5*5)^3*100, ...
100, 250, 625, 1.5K, 3.9k, 9.8k, 24k, 61k, 153k, 381k, 954k, 2.4M !
Let's show the callous and greedy government that for once, Singaporeans are united against their bullying! -
Originally posted by 7PCGST:
I know this is throwing a cold blanket, but I must point out this fact.
[b]Target:
1 Million Signatures!
http://www.petitiononline.com/GST7/petition.html
http://www.gsthike.com/index.php
Enough is enough!
Singaporeans MUST learn to stand up against the Familee's tyranny and economic genocide against Singaporeans! Even if it's not for ourselves, we have to do it for our children and children's children!
If Singaporeans don't want to help themselves, nobody will!
Please urge at least 5 or more of your relatives, friends and colleagues to sign in. Just do it!
The key to the petition success is to publicize it!
If 100 Singaporeans can send out 5 or more emails to their relatives, friends and colleagues to sign the petitions, and half of them do so, and so on, one can imagine the exponentially multiplying effect:
100, 0.5*5*100, (0.5*5)^2*100, (0.5*5)^3*100, ...
100, 250, 625, 1.5K, 3.9k, 9.8k, 24k, 61k, 153k, 381k, 954k, 2.4M !
Let's show the callous and greedy government that for once, Singaporeans are united against their bullying![/b]
We had tried it on the casino issue but what is PM's decision? -
"...Pegging the goods and services tax at 15 percent, the same as the corporate-tax rate proposed by this columnist, would be an elegant way to signal to the market that the Indian tax regime has become stable.
One final improvement will be to scrap all the different individual income-tax rates and replace them with an eastern European-style flat charge.
For the sake of symmetry, this rate, too, can be 15 percent, compared with the current top-bracket levy of about 34 percent. Once again, all the exemptions must be scrapped, though the threshold level, below which no income is taxable, can be kept reasonably high to avoid burdening the poor.
This will practically kill evasion, the bane of the progressive tax system in India, wherein rates rise with incomes.
It is regressive, the Marxists might say, not to take away a big chunk of the income of the very rich. It is doubly anti- poor to do so while charging a high goods and services tax, which even the most indigent cannot escape when it is applied properly.
Progressive taxation does not always work for the poor.
Last year, India collected 662 billion rupees from income tax. There are 18 million households in India with annual income of more than 200,000 rupees. If the government had been able to charge a reasonable 4,000 rupees on average from each such family in a month, it would have earned more and provided better services to the poor.
It should be possible to raise collection with a low, flat income-tax rate. In any case, it is easier to track and penalize consumption, so that is where most of the effort of collecting government revenue must focus. At the same time, the poor can be easily compensated for their goods and services tax burden with cash transfers.
The combination of low direct taxes and a reasonably high goods and services tax burden is being increasingly recognized by the national authorities as an efficient way to boost savings and investments in an economy. Chidambaram should grab the opportunity.
(http://www.iht.com/articles/2006/11/13/bloomberg/sxmuk.php?page=2) -
"This competition suggests that there must be some benefit in having low corporate taxes, and indeed it appears that countries that adopt comparatively low tax rates tend to do better in terms of growth and inward investment than those that do not.....
In the long term, low tax rates should attract more inward investment, which should expand the economy and thereby provide a greater tax base. But in the short to medium term there is often a need for measures to offset the impact of low tax rates, such as improving spending efficiency or relying more on other sources of revenues, such as indirect taxes.
The practical answer favored by some governments seems to be to combine favorable tax rates with a broadening of the tax collection system .....
Tax, under these circumstances, becomes effectively a price that multinationals have to pay to make use of the goods and services that a country can provide. Like any astute consumer faced with this kind of choice, corporations are shopping around globally for the best combination of price and value.
...In summary, from our past 14 yearsÂ’ tracking experience it appears to be economically and socially desirable for countries to strive for lower corporate income taxes. Corporations are sensitive to income tax rates, and the enhanced mobility of capital and labor all over the world increases their ability to transfer functions from a high tax regime to a low-tax country. But, if countries want to offset the risks of relying on lower rates alone, just as corporates in global competition strive constantly for new ways of differentiating products and services and increasing customer loyalty, so, in the face of globalization, governments may be well advised to find new ways to make sure their countries attract and collect a sustainable share of global tax revenue to fund long-term programs.
Loughlin Hickey
Global Managing Partner, Tax
KPMG in the U.K.
http://www.kpmg.com/Services/Tax/IntCorp/CTR/ -
More like fat bonus for the them from GST. News report increase in bonus for them. So incoincident that after increase in GST is announced. They always said increase a bit would not made a different to people. However, we going to see how companies and seller increase not by 2% but maybe even more. Helping the poor is just to cover up. So everybody will accept. They didn't even report how many poor people rejected from financial help. The increase in price will be made twice or more per year in furture. The package they give is not enough to support the poor. Earning few million per year, so what is 2% increase mean to them. It mean nothing to them!!!! You have to live like hell before you can get help. The rule apply for those apply for help: family member must be disable, family member must be dying. So those apply for help have to cripple themselves or kill themselves to get it. Maybe you don't even get it.
Their famous word: Other countries like HK etc increase more than us. But did not report increase in their salary. Why do we have to compete with them in term of cost of living?
Or else they would say minister need to pay more so they would not be corrupted. It seem LKY think that his member all are corrupted but higher pay has suppresses their urge to go to the extreme. -
There was an article in the ST Online Forum where someone described the impact of the 2% increase in GST on different income groups. I quote here:
Is this correct?
Not too sure if anyone saw this artcile? I think he got the reduction in Personal Income Tax rates from the iras web site. These 3 examples quite clearly shows the regressive nature of the GST increase. Let's hope that the package to help the Middle Income pple and poorer (like me) will be there at least until the next elections!
Example 1
In 2006, if after rebates etc. your net taxable income is $60,000, the income tax you need to pay is $2,700 (8.75%). If you spend $800 a month on goods and services, the GST paid at 5% will be $480. Total = $3,180 in tax paid.
In 2007, if after rebates etc. your net taxable income is $60,000, the income tax you need to pay is $2,600 (8.50%). If you spend $800 a month on goods and services, the GST paid at 7% will be $672. Total = $3,272 in tax paid.
From $3,180 to $3,272, the effective increase is 2.89%.
Example 2
In 2006, if after rebates etc. your net taxable income is $400,000, the income tax you need to pay is $61,650 (21%). If you spend $4,000 a month on goods and services, the GST paid at 5% will be $2,400. Total = $64,050 in tax paid.
In 2007, if after rebates etc. your net taxable income is $400,000, the income tax you need to pay is $58,700 (20%). If you spend $4,000 a month on goods and services, the GST paid at 7% will be $3,360. Total = $62,060 in tax paid.
From $64,050 to $62,060, the effective decrease is -3.11%.
Example 3
In 2006, if after rebates etc. your net taxable income is $25,000, the income tax you need to pay is $187.50 (3.75%). If you spend $800 a month on goods and services, the GST paid at 5% will be $480. Total = $667.50 in tax paid.
In 2007, if after rebates etc. your net taxable income is $25,000, the income tax you need to pay is $175 (3.5%). If you spend $800 a month on goods and services, the GST paid at 7% will be $672. Total = $847 in tax paid.
From $667.50 to $847, the effective increase is 26.89%. -
creativity accounting at work. help the poor? my foot.
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(I refer to your quote. )Originally posted by livspore2006:There was an article in the ST Online Forum where someone described the impact of the 2% increase in GST on different income groups. I quote here:
Not too sure if anyone saw this artcile? I think he got the reduction in Personal Income Tax rates from the iras web site. These 3 examples quite clearly shows the regressive nature of the GST increase. Let's hope that the package to help the Middle Income pple and poorer (like me) will be there at least until the next elections!
That's why I sibei hate econs. -
it seems like the gst effect has already taken place. coffee shops that i frequents now suddenly have the drinks prices adjusted. used to be kopi-o kosong was 10cents less, but now it is the same. the wanton mee store now uses noticably less noodle. i told myself i will not eat at that store anymore.
indiscriminate charging also happen in smaller shops. I guess they are worried about the impact on them, so they jump the gun.
it is a sorry state of affairs.... -
hi all,
The article that I quoted from the ST Forum is quite easy to understand as it's simple arithmetic. U guys can quickly take a grab of the IRAS web site for the future 2007 year of assessment rates and do some calculations yourselves based on your earnings.
Since these rates look so regressive, I suspect some of the gov agencies and stat boards hv not yet been aligned yet on the so called package for the poor.
So better be fast since someone has already spotted it last week as I think this is going to be strong political fodder for the opposition. I bet the info is going to be removed fast or some heads will roll.... -
Originally posted by oxford mushroom:
India isnt a good place to compare. The government has insufficient revenue and collecting more may provide better services. But is hard to say becoz more money may go to civil servants who raise their own pays and give themselves bonuses.
"
[b]Progressive taxation does not always work for the poor.
Last year, India collected 662 billion rupees from income tax. There are 18 million households in India with annual income of more than 200,000 rupees. If the government had been able to charge a reasonable 4,000 rupees on average from each such family in a month, it would have earned more and provided better services to the poor.
[/b]
Singapore on the other hand has so many hidden cookie jars of state revenue. the sale of state land is not recognised as a revenue while Hong Kong recognizes it.
OM are you a nick run by a team of people from MICA? -
posted already....therefore delete
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actually, all this, including the song and dance about increasing the civil servant's pay (the poor working hacks won't get much i tell you) seems to be wayang kulit to increase the minister's pay..
probably funded by the 2% increase?