The REAL reason why we won't exempt basic goods from GST!
I read this report in TODAY on a recent forum between Minister Tharman and certain Singaporeans.
One statement made by Tharman made me fall out of my chair literally!
It goes like this : "He added that if necessities were exempted from GST, the benefit would go to the well-off, who spend more on basic goods, than to the poor."
On first look I must say I fell off my chair. But on closer look, you can see many layers to this.
Most among the online community are cryin foul. They are saying that such basic illogic would qualify them to be Finance Ministers instead of Tharman Shanmugaratnam.
Illogical? Well yes and no. The catch is in the definitions of the terms used.
What would consitute as "basic goods"? Let's take a look.
1) Staple foods eg rice, eggs, chicken, fruits, vegetables
3) Utilities eg Water
4) Utilities eg Electricity
Most people have harped on basic goods being staple foods. While that is one way to look at it, there IS a point that the well off stand to benefit more because they do tend to eat more. There is a possibility that the Finance Ministry has done some research showing that well to do people tend to be bulimic and thus eat ten times the amount of food and then vomit 90% of it out.
Next we come to clothes. Now you're probably getting the idea. Do you draw a line between "luxury clothes, not-so-luxury-clothes, staple-clothes"? Minefield there.
Water and Electricity is the next stop. Well we all know that the rich live in bigger houses and have more lights and sleep in airconditioned homes etc. So usage would be much higher than the poor.
I think the REAL reason why the government does not want to exempt "basic goods" from GST is because of the LOST income in taxes from the rich rather than because it would help the poor.
That seems the more likely answer, but of course it is politically not a wise statement to make.