As the Goods & Service Tax (GST) is set to increase to 9 per cent beyond the next General Election, the government has unveiled a raft of sweeteners to make the journey seem less arduous. The Straits Times has announced via an attractive headline that there will be $1billion worth of GST vouchers and Medisave top-ups which would benefit 1.6 million Singaporeans. While this all sounds good, is it misleading?
Yes $1 billion may sound like a huge amount but in reality, does it really help the average Singaporean? Singapore has nearly 6 million people (3.87 million residents). In that regard, I don't think that helping 1.6 million people is enough?
Also, to what extent will the 1.6 million people receive help? Is the criteria geared towards only those who are quite literally living hand to mouth? What of the increasingly squeezed middle class who will really be affected by this? GST is a consumer tax with no exemption for daily necessities. Surely a better way to help is to provide exemptions for products rather than arbitrarily selecting and informing the chosen few to receive the vouchers?
This Straits Times article is also extremely slanted and shoddy. It only interviewed one person who has said it helps her. Surely any balanced article should also investigate detractors and air their views?
Besides, why invent such a complicated system of administering GST when it would be much simpler to just have exemptions for certain items to be exempted? This would help a whole lot more than a cumbersome eligibility criteria that is unwieldy and difficult to navigate through. Could it be construed as a means to befuddle Singaporeans into thinking that they are getting a good deal when they are not? Perhaps not, but it does have that effect.
The most glaring issue is that while we are raising a tax is that most likely to affect the middle classes, income tax rates (which should really tax high income earners more) remains as is.