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
2) Clothes
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.
posted by Dr Oz bloke @ 4:33 AM
3 Comments:
Hey Doc,
I couldn't help smiling away when I saw this post, cos I had the same sentiments with you when I read that article. I was figuring how I could craft my words to be more politically correct and you beat me to it. :)
The rich that I know don't spend much in Singapore :)
They shop,eat and entertain in Hongkong and Shanghai.
Maybe, it's the loss of income from the middle class that is more important to the Government.
Honestly, even myself, I don't really buy much in Singapore except the daily groceries. All this talk about cheaper shopping in Singapore is not really true. And the shopping experience can't be compared to what other countries can offer.
As for pandering to the corporations and well-heeled, I'm not sure if it's losing your wife and soldiers in tow analogy.
To keep the big companies staying here, we are giving more than we can take. A report from Morgan Stanley can confirm that. Nothing new and if I am an MNC, I would do the same too, knowing the balance of power is with me.
Micheal Porter had some good advice for Singapore recently. Nothing new. Since my Uni days, many had talked about growing our own SMEs. Unfortunately, the government took the route of Singapore Inc., which had become a target board for money grabbers only.
A string of A* can't really equip one with all the business acumen needed to succeed in a world of big bad wolves.
This place isn't called Disneyland with the death sentence for nothing.
This is well-kept theme park where reality is suspended.
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