| |
| |
![]() |
| |
|
| |
|
| |
|
SINGAPORE: Second Finance Minister Lim Hwee Hua said the goods and services tax (GST) will not be reduced.
During the second reading of the GST Amendment Bill on Tuesday, Mrs Lim was asked by West Coast GRC MP Ho Geok Choo if the GST can be cut temporarily if economic conditions worsen.
Mrs Lim said a GST reduction is not effective in stimulating demand in the local economy, as the recent experience of Britain has shown.
She said Britain made a two per cent cut in Value Added Tax, but there was no perceivable effect in terms of an increase in consumer spending.
More importantly, the minister said lower-income households would benefit more from targeted assistance rather than a cut in GST.
She said: "A two per cent GST cut would be less effective in helping the lower and middle income groups compared to the measures that were announced to help households in the Budget 2009 statement. A better way would be to target household assistance schemes at those who would require these assistance more."
The amendment bill encompasses mostly technical changes, including extending the current GST treatment for physical vouchers to all forms of vouchers.
The zero-rating treatment will also be applied to all aircraft used for international travel.
Mrs Lim added that a review is underway to see if the zero-rating treatment can be applied to the shipping industry, given that the air and shipping industries generally have similar tax treatments. - 938LIVE/vm
|
