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01 Mar 2019  (1609 Views) 
Ministry of Finance

Why I strongly advocate that GST be abolished
I have advocated on several occasions that GST should be abolished in Singapore. Some people think that I am being "populist". They also think that it is not possible for the government to abandon this revenue source.

Let me explain my thought process. 

a) First, I believe that any government, and especially the Singapore government, should have adequate revenue to meet its operating expenses and provide the public services. These public services include defense, education, health care and taking care of the poor people. They should not enter into debt to provide these operating expenses.

b) When I recommend that GST should be abolished, I have checked that the operating revenue, without the GST revenue, is more than sufficient to meet the operating expenses.

c) The operating surplus does not take care of development expenses. I hold the view that the sale of land (which is estimated to be between $10 to $20 billion a year) is sufficient to meet the development expenses. If sale of land is treated as revenue, which is according to the recommendation of the International Monetary Fund, the development expenses can be covered. 

d) Of all the revenue sources, I have only singled out GST revenue to be abolished. Let me explain why I am against GST. It is very costly to administer and has to be applied to several million transactions every day. This cost to calculate, collect and account for GST has to be incurred by business and will be added to the prices that consumers have to pay. I do not accept that it is computerized and the cost is low. That is not true.

e) If there is a need to collect revenue from consumption, I prefer that it be done through import duties (i.e tariffs) or added to the cost of manufacturing (i.e. excise tax) or through payroll tax or service tax. This is applied in bulk and not through small purchases. The tariff and excise tax can also be applied to specific products.

f) If there is a revenue shortfall, I would recommend that the income tax should be increased for income in excess of $250,000 or for the rate of corporate tax to be raised.This does not appear to be necessary at this time.

I consider that GST to be a very bad tax. It is regressive and hurts the poor more than the wealthy. It is also costly to administer and adds to the cost of doing business. 

I will continue to advocate for the total abolishing of GST in Singapore. 

Tan Kin Lian

Please vote (agree, disagree) to my thinking.

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