True GST level in Singapore is secretly 9% already, and much more hurting the poor.

Discussion in 'Asia' started by Bic_Cherry, Aug 23, 2019.

  1. Bic_Cherry

    Bic_Cherry Active Member

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    True GST level in Singapore is secretly 9% already, and much more hurting the poor.

    That is if u add the $3 billion in foreign workers levy to the revenue collected by Singapore government which is roughly equal to 2% GST (and more severely affects the poor).

    The government revenue from charging 7% GST is S$11.0 billion in FY 2017/8, this works out to be approx S$1.57 billion revenue per GST point increase. https://www.iras.gov.sg/irashome/An...mation-and-Highlights/Our-Revenue-Collection/

    According to https://www.theonlinecitizen.com/20...evies-have-been-used-to-help-foreign-workers/ , government revenue from foreign worker levies was $3.0 billion for the same period. This works out to approximately just under 2% GST equavalent. Poor people are more affected by the increased costs from corporate payment of foreign worker levies since these levies are targeted at basic service workers providing low costs everyday services like supermarket shelvers and cashers, hawkers, bus drivers, nursing aides, construction workers, cleaners, security guards, delivery person's etc of which business costs accrues to higher prices everyday services.

    Rich people are proportionally less affected by these worker levy business costs because they have eliminated low costs workers with high tech (high tech security guards may be on employment pass if they use AI to do security monitoring) and other bespoke service employees who are paid S pass salaries (e.g. music teachers, country club managers, Michelin star chefs etc).

    Thus, the GST burden on poor citizens in Singapore is very high already due to the implicit costs of living increase caused by foreign worker levies.

    PAP government should thus look elsewhere for a source of government revenue increase, other than an increase in the rate of GST which is a regressive form of taxation which is financially hurting the poor.

    One option is to implement more progressive taxation scales on property both commercial and residential because the annual collection of just $4.4 billion is certainly miniscule and quite derisory. Real estate is a measure of an individual/ corporate wealth and thus should be progressively taxed so that real estate properties can be more evenly distributed across society.

    Since effective annual GST revenue (including foreign worker levy) is $14 billion, PAP gahmen should strive to increase property tax revenue to possibly $8.8 billion (on progressive scale) so wealthy real estate owners can contribute more to Singapore government revenue.
     

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