GE2025: PAP's Lawrence Wong on calls to lower Singapore's GST

Key Concepts:

• GST (Goods and Services Tax): A consumption tax levied on most goods and services.
• GST Vouchers: Cash rebates provided by the government to offset the impact of GST, particularly for lower and middle-income households.
• Tiered GST System: An implicit system where different groups effectively pay different GST rates due to rebates and vouchers.
• Effective GST Rate: The actual GST rate paid after accounting for rebates and vouchers.

GST Structure and Rebates

The speaker addresses suggestions for GST exemptions or a zero GST rate on essential goods. They argue that Singapore already operates a tiered GST system. The standard GST rate is 9%. However, the government provides permanent GST vouchers to lower and middle-income households.

Impact of GST Vouchers

These permanent cash rebates effectively reduce the GST rate for middle-income households to below 7%. This is because the cash received offsets a portion of the GST paid.

Who Pays the Full 9% GST?

The speaker highlights that foreigners, tourists, and high-income households are the primary groups paying the full 9% GST rate. The speaker argues that it is desirable for these groups to pay the full rate.

Consequences of a Uniform 7% GST

The speaker argues that reducing the GST rate to a uniform 7% across the board would benefit foreigners, tourists, and high-income households, as they would pay less. This would result in fewer resources available to the government for healthcare and senior care for Singaporeans.

Key Argument

The speaker's central argument is that the current tiered system, achieved through GST vouchers, is preferable because it allows the government to collect more revenue from those who can afford it (foreigners, tourists, and high-income earners) and use those resources to support Singaporeans, particularly in healthcare and senior care.

Notable Statement

"Don't you want them to pay 9%? I want them to pay 9%." This statement emphasizes the speaker's belief that foreigners, tourists, and high-income households should contribute more through GST.

Synthesis/Conclusion

The speaker defends the current GST system, emphasizing that it is effectively tiered due to the provision of GST vouchers. This system allows for higher revenue collection from foreigners, tourists, and high-income households, which can then be used to fund essential services for Singaporeans. A uniform lower GST rate would reduce government revenue and potentially impact the funding of healthcare and senior care.