The following is an excerpt of an article posted by blog Diary of A Singaporean Mind.
You know how far down the standard of debate has fallen when an MP stands up and argues that cutting the GST does not help the poor. GST is a regressive tax that penalises the poor the most because they spend most of their income. If you’re Wee Cho Yaw or Peter Lim you spend maybe 2% of your income and invest the rest, so you pay 0.0014% of your income in GST. Why was GST implemented? Before our income gap ballooned to what it is today, the PAP govt openly admitted that the purpose of GST is to cut corporate tax and the income tax of high income earners. This is seen from the 2003 budget statement by the then Finance Minister Lee Hsien Loong:
“4.3 From YA 2003, I have decided to cut the corporate income tax rate from 24.5% to 22%. This 10% reduction will save businesses $700 million a year.
4.4 Also with effect from YA 2003, the top marginal personal income tax rate will be cut from 26% to 22%, with corresponding cuts in all income bands. This will reduce the tax payable by most taxpayers by 13% to 16%, saving them $620 million every year.
4.5 I have decided to raise the GST rate from 3% to 5% from 1 Jan 2003. The increase in GST is expected to raise an additional $1.3 billion of tax revenue per year.”
To read on, click here.
