The following is an excerpt from an article posted on VotingRP

by Tony Tan

In the recent Community Care Endowment Fund (ComCare) appreciation lunch on 2 Dec 2010, PM Lee spoke on the government’s approach to boost our social safety nets. PM Lee said that we should not create a handout mentality and impose a tax burden that would prove impossible to roll back.

On the point of further taxation in order to enhance the social safety net, I like to highlight that the GST had already been increased from 5% to 7% in 2007.

“Speaking in Malay, Mandarin and English, Mr Lee explained that the hike was necessary to finance the enhanced social safety nets, needed to help the lower income group and he emphasised that the offset package would more than counter the rise in GST.” Extract from the Straits Times article: “GST to be raised to 7%: PM Lee” (13 Nov 2006)

After GST was increased to 7% for more than 3 years, we need to take stock of the tax burden already imposed on Singaporeans and how that extra revenue had been used to enhance our social safety nets. Reported by the Ministry of Finance, the extra revenue generated by hiking the GST by 2% is about S$1900 millions annually.

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