Straits Times: Opposition MPs slam GST hike

PARLIAMENT

BUDGET DEBATE: DAY TWO

OPPOSITION MP Low Thia Khiang yesterday hit out at the increase in the Goods and Services Tax (GST), saying the Government could have considered other ways to balance the Budget.

He noted that it was to make up for revenue lost from income tax cuts.

Mr Low (Hougang) also questioned its timing: GST goes up from 3 to 5 per cent next January, but the tax cuts take effect only in 2004.

Instead, do away with double tax deductions for donations to charities, he said. Philanthropists won’t stop giving to charity just because they don’t get this extra tax break. They will be “very happy to donate” because not raising the GST will benefit not only the charities but also all Singaporeans, he said in Mandarin.

Another way would be to delay the upgrading of HDB flats. Then the government would not have to spend the $300 million set aside for it.

In a similar vein, Non-constituency MP Steve Chia suggested exempting older workers and retirees from paying the GST.

If the Government found it too hard to determine which were staples for which GST could be waived, he suggested it could get help from FairPrice whose supermarket chain has offered to absorb GST on certain staples.

“If it is so easy for NTUC FairPrice to produce a list of such staple items and absorb the GST, I believe the Finance Ministry can do a lot better than a blanket ‘no’,” said Mr Chia.

He also asked for a study to be done in countries where essential goods are exempt from sales tax and for a similar system be implemented here.

Mr Gan Kim Yong (Holland-Bukit Panjang GRC) took it on himself to hit back.

Both opposition MPs, he said, had overlooked the $4-billion offset package meant to cushion the impact of the GST hike.

Exempting certain staples from GST, he argued, would be a very costly exercise that would drive costs and taxes up in the long run.

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