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With just 10 days to go before Budget Day, Singaporeans still concerned about the impending hike in the Goods and Services Tax (GST) must understand that it is not simply a transfer of money from one pocket to the next.
Making this point yesterday, Defence Minister Teo Chee Hean said the GST increase, which is likely to go up from 5 to 7 per cent this year, also has to be viewed as a necessary measure to grow Singapore’s global competitiveness.
“We must remember that (raising) the GST is not just a transfer exercise to see who you take money from and who you transfer it to. That’s how you cut up the pie, but more importantly, it’s also about growing the pie,” he told reporters at the sidelines of a community event yesterday.
Details of the GST hike — including its implementation date — will be unveiled in Parliament on Feb 15.
With the hike announced last November, the Government quickly gave assurance that an offset package will be introduced to help the lower-income group.
Already, it has promised that all government fees will stay frozen and not be raised for one year after the tax goes up.
Feedback that Mr Teo has received from the ground has revealed that Singaporeans are “looking forward” to this year’s Budget, which will be delivered by Second Finance Minister Tharman Shanmugaratnam.
Mr Teo, who is also a Member of Parliament for Pasir Ris-Punggol Group Representation Constituency, said: “The constituents understand the reasons why we need to do the GST. They are looking to see how particularly the lower-income Singaporeans will be cushioned from the effects.”
He spelt out the positives of the 2-percentage point hike, which is estimated to boost the Government’s coffers by about $1.5 billion.
“This is also an opportunity for Singapore to position itself more competitively, whether it is for investments for the future such as education and infrastructure,” he added.
But two Opposition party leaders said there is still some anxiety on the ground.
Mr Chiam See Tong, Singapore Democratic Alliance chairman and Potong Pasir MP, said there is the worry about the “rounding up” effect at coffeeshops and hawker centres.
Mr Chiam, who met with 40 residents over the GST hike yesterday, gave an example where these retailers may increase the price of a bowl of noodles from $2.50 to $3.
This 50-cent increase, Mr Chiam said, is more than the 2-percentage-point increase in GST.
Workers’ Party chairman and Non-Constituency MP Sylvia Lim said: “Right now, there are a lot of pieces of the jigsaw still missing, so we can’t assess how good the Government’s promise is. The people on the ground are worried, for sure. They are not confident of being able to cope with the GST increase.” - TODAY/ra
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