Friday, April 20, 2018

Why GST should be abolished in Singapore

I read several reports in the social media about the general election in Malaysia.

One key news that keeps being reported is the complaint from voters about the high cost of living in recent years.

Why was there an increase in the cost of living that affects the lives of the ordinary people?

I am sure that the main culprit is the introduction of the GST in Malaysia on 1 April 2015.

Although GST was exempted for essential items, such as food and medicine, it still have a major impact in increasing the cost of living.

The example in Malaysia show clearly that GST is harmful to the economy and to the lives of the ordinary people, even if it is waived for essential items.

GST is a costly and inefficient tax. As many people have pointed out, it is also a regressive tax, as it hits the lower income people the hardest.

It is not the GST itself. We must also add the cost of administration that businesses have to incur. They have to eploy more staff to take care of the GST calculations and accounting to the government. The additional staff cost will be passed on to the ultimate consumers.

We must also not forget the additional profiteering. The businesses will not only add GST and the higher staff cost, but will also take the opportunity to increase their profit margin amidst the confusion.

Now, I come back to Singapore.

For more than a decade, I have written on many occasions that GST is bad for the economy. I now call for GST to be totally abolished in Singapore.

Can Singapore afford to lose the revenue from GST?

Yes. Singapore collects a lot of revenue from land sale. The amount is not reported, but is estimated to be $20 billion a year. This is revenue that most other governments do not have, apart from Hong Kong.

The revenue from GST is $11 billion a year.

The Hong Kong government does not collect GST because they also collect a large revenue from land sale. There is no justification for Singapore to have GST when it also has a lot of revenue from land sale.

If we abolish GST in Singapore, we can bring down the cost of living by about 10%.

Do you agree that GST should be abolished?

Tan Kin Lian


Unknown said...

I can't remember pap saying that gst is "progressive tax", but they definitely say it is "fairer" ... consume more pay more!

What they refuse to admit is that low to middle income spend a big % of their income just on basic necessities.

Rich people spend much lesser than half their income ... The rest goes into savings, investments which are tax-free or lower tax.

Yujuan said...

GST is we provide Govt a legitimate way to keep on increasing rate at their pleasure, and Singaporeans can't protest, and our country would have the honour of being ranked the most expensive country many many years down the road. No end one.
Can live like paupers eating rice, ikan bilis and sambal chilli, can take MRT and buses, can use fans, bathe in cold water using bucket and scooper (water tax also very high), can use cheap toiletries, can buy cheaper clothings, but cannot buy cheaper medical services or use cheaper plumbers, electricians or other specialized services.
Say GST here keeps up with Canada, presently at 13 to 15%, at least this country has medical welfare benefits for her people, irrespective of Canadians paying higher income taxes. We at 9% soon not far off huh?
Not a matter abolishing GST, matter this tax could be an uncontrolled devil in disguise, like the internet.

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