REACH 308 - How concerned are you with the impending GST hike? What do you think of the measures from the Government such as the Assurance Package, to help Singaporeans cope with the increased cost of living? (SK)

12 Jan 2022 (10am - 7pm)

REACH

[9:54 am, 12/01/2022] +REACH: Dear Contributors,

Welcome back! 😊

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Megan 😊

[10:01 am, 12/01/2022] +REACH: 📢 Topic 📢 

The impact of the goods and services tax (GST) hike will be delayed for the majority of households in Singapore, and the date the rise takes place is not when Singaporeans will feel its impact, Second Minister for Finance Indranee Rajah told Parliament on Tuesday (Jan 11).

"In deciding the timing for the GST hike, we are carefully considering the overall economic conditions. The economy is recovering steadily and, barring fresh disruptions, it should grow in step with global economic recovery," said the minister, adding that gross domestic product is expected to grow by 3 per cent to 5 per cent this year.

💬 How concerned are you with the impending GST hike? What do you think of the measures from the Government such as the Assurance Package, to help Singaporeans cope with the increased cost of living?

First announced in 2018, the increase in GST is meant to help Singapore meet rising recurrent spending needs, especially in healthcare and social support.

Irrespective of when the GST goes up, the Government will be able to delay its impact on Singaporeans through the Assurance Package, she added.

The S$6 billion Assurance Package, first announced in the 2020 Budget, will offer cash payouts of between S$700 and S$1,600 over five years to all adult Singaporeans. This will help offset at least five years' worth of additional GST expenses. Those living in one- to three-room flats will get enough to offset about 10 years' worth of extra GST expenses.

This is on top of various schemes - such as the GST Voucher – U-Save rebates, which help with the cost of utilities for those living in Housing Board flats; as well as Community Development Council Vouchers, which defray food costs; and Public Transport Vouchers, which help those in lower-income groups cope with fare adjustments.

As the Government prepares for the upcoming Budget, priority will be given to helping Singaporeans cope with the cost of living. The scope of household support measures is also being reviewed, she said.

The Government will continue to look out for low-income households and the majority of middle-income households, she said.

👉🏼 https://www.straitstimes.com/singapore/politics/impact-of-gst-hike-will-be-delayed-for-singaporeans-but-rise-cannot-be-put-off-forever-indranee

👉🏼 https://www.straitstimes.com/singapore/politics/spore-does-not-expect-persistent-accelerating-inflation-measures-in-place-to-mitigate-impact-low-yen-ling

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[11:01 am, 12/01/2022] +REACH: Dear Contributors

We’d love to hear more from you on today's topic 😊

We have had good feedback and hope that we can keep the discussion robust and active!

Megan

[11:06 am, 12/01/2022] +WJ: Not a concern since there's cushioning measures.

[11:08 am, 12/01/2022] +Caleb: No comment. Suck thumb lor

[11:16 am, 12/01/2022] +Elena Woo: The not-enough cushioning measures.

[11:16 am, 12/01/2022] +YT: I understand the need to raise GST. But perhaps government can also consider taxing luxury items more. For example, white Bentleys?

[11:19 am, 12/01/2022] +Riviere Condo: I think as long there is support for lower income, GST raise is inevitable. Do more to help lower income or those that facing financial hardship during this time.

[11:25 am, 12/01/2022] +Elena Woo: +1

[11:25 am, 12/01/2022] +Timothy Low: I support the idea of increasing cigarette tax - helps to increase government and curb smoking rate among Singaporeans

[11:28 am, 12/01/2022] ☸️  Danny 心: 

1. There are 1.37 million households.

2. About 370,000 are high income earners.

3. On average, if the monthly expenses of the 1 million is $3,000 a month or $36,000 a year, gst for 9% is $3,240.

4. This means government fork out $3.24 billion to the 1 million Households - lower and middle income - all gst is covered.

[11:30 am, 12/01/2022] ☸️  Danny 心: 

1. Better economic performance, business doing well, higher salary are the best solutions to cushion against gst hike and inflation.

2. Government gst rebate through assurance package to delay the impact of the gst hike - is a good instrument to minimise the immediate impact of the gst hike and inflation.

But higher salary is still the long term best solution.

[11:32 am, 12/01/2022] +YT: Sin tax.

[11:35 am, 12/01/2022] +Vivian: Ya agree... more rebates... but those middle income also very tough cos they are not low income but struggling during this period and hardly got any help from Govt.

[11:36 am, 12/01/2022] +Caleb: +1

[11:44 am, 12/01/2022] +65 9847 9001: Just curious. How did you get 3k a month on expenses? That's like 100 a day for family of?

[11:52 am, 12/01/2022] +BL: +1

[11:56 am, 12/01/2022] +BL: Very considerate of Gov to make such an allowance for all Singaporeans. It clearly offsets the increase for lower income families and makes the GST much more proportional. Excellent policy.

[11:57 am, 12/01/2022] +Caleb: +2

[0:14 pm, 12/01/2022] +RH: Agree

[0:15 pm, 12/01/2022] +Caleb: +2

[0:15 pm, 12/01/2022] +Rama: Like the one involved in the red swastika school incident yesterday!?

[0:16 pm, 12/01/2022] +Rama: Liquor,  wine and beer too!

[0:16 pm, 12/01/2022] +~a: +3

[0:18 pm, 12/01/2022] +~N: Very concerned.

Thank you for the Assurance Package. I'm not complaining, but if you give me a choice, I prefer to know that my labour and the wages in return are sufficient to manage the costs of living rather than receive some form of financial assistance. economic self-sufficiency is more empowering

[0:20 pm, 12/01/2022] +JC: I disagree with the approach to provide cash payouts all adult Singaporeans. 

We should channel the resources to those families/households that are most in need - otherwise it's a waste of money.

[0:22 pm, 12/01/2022] ☸️  Danny 心: 

Just an illustration.

[0:23 pm, 12/01/2022] ☸️  Danny 心: 

If household spend above that amount, household pay.

[0:23 pm, 12/01/2022] +REACH: More than 6 in 10 eligible pupils in special education schools have signed up for Covid-19 jabs

About 3,900 children aged six to 11 in special education (Sped) schools have been invited to take the Covid-19 vaccination.

More: https://str.sg/wMaA

[0:30 pm, 12/01/2022] ☸️  Danny 心: 

1. Someone mentioned, $10 billion is collected from gst.

2. 80% come from top 10% high income group.

That means $8 billion is contributed by this 10% top income earners.

3. Approximately 370,000 top income earners contribute $8 billion gst revenue every year.

It means on average, $22,000 gst is contributed by this group.

This mean on average, this group spend $240,000 per year.

[0:37 pm, 12/01/2022] +Joseph: 😂 👏👏👏

[0:42 pm, 12/01/2022] +BL: Point 1 was me. Where did you get point 2 from?

[0:43 pm, 12/01/2022] +BL: Here are the tax revenue collection numbers.

[0:44 pm, 12/01/2022] +ALEX: Top 10% contribute 80% of income tax not GST.

[0:44 pm, 12/01/2022] +Elena Woo: +1

[0:44 pm, 12/01/2022] ☸️  Danny 心: 

Oh is it.

[0:47 pm, 12/01/2022] +ALEX: The figures for GST are not published.

I suspect that the top 10% spend a far smaller proportion of their total income and also that they may spent a greater proportion of their income outside Singapore than most, accordingly I suspect that "top 10%" contributes a far smaller proportion of the GST income.

[0:48 pm, 12/01/2022] ☸️  Danny 心: 

Then my mistake.

[0:48 pm, 12/01/2022] +Joseph: Haven’t had the time to go through the latest data on SG tax collection yet .. but quite sure can find the info here 👇

https://data.gov.sg/organization/inland-revenue-authority-of-singapore

[1:59 pm, 12/01/2022] ☸️  Danny 心: 

1. I checked the number of private property purchase last year. 13,000 units are sold 

Assume each unit cost $2 million, then $26 billion is transacted.

2. In 2021, 90,900 cars are sold. Assume each one cost $100,000, $9 billion is transacted.

3. So just property and cars alone, $35 billion is spend by the rich.

4. So about $3.15 billion earn by government just on property and cars alone - not including other luxury items.

5. Not too far fetch that top income earners contribute a large percentage of gst income to the government coffer.

[2:13 pm, 12/01/2022] +Adrian: For S/N1, I think residential property does not contribute to GST. Main "tax" would be stamp duties/property tax as opposed to GST

For S/N 2, the GST component for cars is also smaller (I.e not including COE, ARF) 

Disclaimer that this is from Google I might be wrong 😅

[2:14 pm, 12/01/2022] ☸️  Danny 心: 

Hahaha. Then my knowledge on gst very limited.

[2:16 pm, 12/01/2022] +Adrian: No worries. Just To highlight the calculation not so straightforward 😄

[2:28 pm, 12/01/2022] +Liew@SG: +1

[2:28 pm, 12/01/2022] +Joseph: It’s about Income tax versus Consumption Tax. 

GST is not the only consumption tax. This includes things like stamp duty(property), ARF (cars) etc.

[2:30 pm, 12/01/2022] +Joseph: As for the calls for rebates to cushion the GST increase, let’s be realistic. The rebates should only cushion, not completely offset the increased tax. Otherwise, what is the point of raising it in the first place

[2:33 pm, 12/01/2022] +Rama: Agree

[2:33 pm, 12/01/2022] +Joseph: Cushioning the impact either by partially offsetting the increase over a longer period, or fully offsetting for an initial/shorter period. Can’t have both. 

A higher subsidy/offset in the initial period after and increase (of tax) gives consumers time to adjust their consumption habits/pattern. But ultimately, it has to rise until such level/price that the majority of consumers cannot afford the higher prices. Otherwise prices will just keep rising ie. run away inflation.

[2:35 pm, 12/01/2022] +Joseph: A good example is childcare and property subsidies. Govt grants alone always only lead to higher prices, not necessarily higher affordability.

[2:36 pm, 12/01/2022] +Joseph: In the case of Property prices in SG, unless you own multiple properties, otherwise, for owner-occupants, higher property prices mostly mean greater debt/higher mortgage.

[4:25 pm, 12/01/2022] +BL: Yes I don't think there is GST on COE for example. GST would only apply to the car before Duty is added, AFAIK.

[4:46 pm, 12/01/2022] +Dan: https://www.straitstimes.com/singapore/politics/10m-population-not-really-a-ridiculous-number-for-spore-to-plan-for-liu-thai-ker

At first, I thought what is this guy talking about? Raising our population to 10M will be straining our resources. But the keyphrase here is to make 10m as a planning parameter and not a target. After delving deeply, we should put in resources to look into planning for 10n.

Hong Kong is approaching 7.69M. we are at 5.9M. If we plan our transport system, housing system and other infrastructure to suit 10m, it will ease the overcrowding problem that we have currently.

[4:46 pm, 12/01/2022] +Rama: Valid point

[4:56 pm, 12/01/2022] +BL: Good way of thinking about it! Build for 10m to avoid over crowding and to ensure a strong infrastructure.

[5:31 pm, 12/01/2022] +JC: here we go again... circa 2011... 🤣

[5:33 pm, 12/01/2022] +Joseph: That’s 1 way to continue to inflate “asset” prices 😂

[5:48 pm, 12/01/2022] ☸️  Danny 心: 

1. Sustainable quality population growth is more important than target population growth.

2. Quality population growth refer to:-

a. Ability to grow talent from the population to support our economic growth and performance.

b. Sufficient manpower to support national service and homeland security.

c. Sufficient population to drive internal consumption and boost domestic economy - contributing to our tax revenue and business activities.

[5:51 pm, 12/01/2022] ☸️  Danny 心: 

d. Most important, maintain high GDP per capita - so that individual population are wealthy to live comfortably.

These should be our objective of quality population growth and not just meeting the population number.

[6:02 pm, 12/01/2022] ☸️  Danny 心: 

2a. Refer to highly educated population with relevant skillsets to helm R&D, high tech industries, professional knowledge in medicine, IT, AI, engineering, law, accounting, building architecture etc. - that will produce high value added products and bring high value added services contributing to high economic development and growth.

2b. Refer to quality military servicemen and homeland security that can operate sophisticated military machinery or home security technology to protect our homeland.

2c. Refer to high income earn by our individual population as a result of high productivity, valued added economic product and services produced by our individual workforce.

2d. And as a result, our per capita GDP is high due to high income earn by our individual and household.

Then such sustainable quality population growth - is what we needed.

[6:32 pm, 12/01/2022] +Boon: Dear REACH, the drivers to increase the GST are clear eg, health costs, welfare, etc. The govt subsidies are not insignificant - thank you. The eyes need to look further ahead to after this round of GST, to the next round - and start practical work to slow the rising health and living costs; and other costs. Costs like ensuring NTUC prices remain affordable, hawkers are not privatized that leads to silly increases in basic food costs (a bowl of noodles in heartlands at $5-9 is no longer rare)

[6:36 pm, 12/01/2022] +Rama: Yeah

[6:37 pm, 12/01/2022] +Boon: It’s not just GST but income taxes that reportedly can be increased. Salaries in Sg are unlikely to suddenly rise to match the drop in disposal income and inflation. Therefore, the GST topic needs to fit into the whole context of income tax+rising living costs with stagnant salaries - and how Sg can remain competitive globally.

[6:41 pm, 12/01/2022] +Boon: GST hits the retirees and those without income. In our greying population, where jobs for ordinary retirees can be to drive cabs, security guards, sole proprietary  and similar jobs, the relief should be more targeted to these groups of our fellow people.

[6:43 pm, 12/01/2022] +REACH: Dear Contributors,

⏰ We will be closing the chat in 15 minutes ⏰

Thank you very much for being part of our WhatsApp chat and participating actively.

Goodnight!

Megan

[6:57 pm, 12/01/2022] +Smiley face: 12 January, 2022

To: Distinguished MTF and All Honorable Members 

" Have Daddies (Mempunyai bapa, 有爸爸) And Daddies Have (Ayah ada duit, 爸爸有钱)..." 

"Kes rumahtangga mampu bertahan dari bulan ke bulan dan dari mulut ke mulut..."

- - tanpa nama

Main:

A moment of short and fun twist from an old saying, ''everyone has a father" and today's perhaps it is becoming of "daddies have" deep pockets? 

In the search of extra revenues, the taxman will have to weigh the chicken-and-egg of the tangibles and livelihoods of the first 50% (median over mean) of a bell curve based on household incomes. 

What's the big picture? This covid has changed many things and the way society and economy evolve, it is paramount to relook at the spectrum of existing taxes and come up with new inclusive and progressive tax structures that will yield favorable sentiments and jell all walks of life, sound policies and perhaps an unintended boost up of  political capital for the policymakers.

Subsidies - 

Essential subsidies/social assistance schemes should be skewed and fully given to the the 20th and below percentile of the bell curve of household incomes.  The rest of the "better off" households will receive partial and progressive subsidies from the 80th percentile down to the 21th percentile. The top down to the 81th percentile are deemed to be well off and self sufficient people. 

Do you need it? Option be given to these "top ranger" citizens to reassign the GST vouchers (and other packages) to fellow citizens whom need most especially the first 10% of households.  

Personal Income Tax - 

1) $0 to $40,000

Free Tax

2) Next $20,000

Tax Free*

3) Up to $80,000

@ 5% tax

4) $320,000 and above 

@ 23% tax

Applicable to SINGLE income household. Household with DUAL incomes and Schooling age child /children will enjoy tax free of up to the first $60,000*,  5% tax thereafter.

A flat 23% tax for income of $320,000 and above after all deductibles.

Luxury Tax (GST) - 

A progressive tax approach - All BRAND NEW luxury vehicles & motorcycles to include EVs of $250,000 / $25,000 and over based on sales invoice. 

1) Sales Tax 

Car with SALES invoice of $250,000 (including COE) and over will need to pay 9% GST.

Motorcycles with SALES invoice of $25,000 (including COE) and over will need to pay 9% GST

2) Additional Vehicles Tax

The Second or more ownership of luxury and onwards vehicles / motorbikes (USED vehicles/motorbikes of 2 yr to 10 yr) belonging to the same registered household address regardless of owner's name shall be taxable at 7% based on the SALES invoice for RESALE vehicles. Used Vehicles/motorbikes of 10 years and above will be taxed at 3%. To qualify what's luxury, these used vehicle based on the "ORV" (Original Registered Sales Value) sales invoice will determine the GST payable. 

Two tier luxury tax that is OMV as the import tax while ORV is a consumer tax. 

3) Niche Tax 

Classics and collectibles will be taxed 9% GST on top of the import tax. The COE  & Road Tax under this exceptional niche luxury items will be 25% of the prevailing COE for luxury & open category and its respective Road Tax. 

4) Lifestyles Tax  

How about LEISURE Yacht under 50 footer and above 50 footer? GST taxable like luxury cars, these New versus PRE-owned?  Gasoline (Diesel) Differentiated Price (GDP) vs Street Gasoline Price (SGP)?  MPA annual tax similar to road tax, foreign registered or local registeted? Yacht size, purpose, duration of calling a port fees varies? Every trip/navigation charges plus a fixed "sea tax" ranges from $350 annually for a family NO CABIN leisure craft, fleet rental craft and foreign registered mega yacht payable in thousands of dollars? This case ship size, length and number of cabins matters in drafting an updated progressive tax structure for these exclusively well-heeled sea legs. 

Afterwords:

The definition of luxury (classic collectibles) vehicles / motorbikes / yachts / GCBs in Singapore context means IN EXCESS of the NORMAL daily utility needs (needs vs wants). Perhaps one will view these luxuries as more than "CREATURE COMFORT"!  It is a personal choice, pockets and lifestyles and policymakers to collect taxes. 

Toyota Altis vs Lexus IS

 Honda 150cc vs Big Harley

HDB vs GCB

Fabrication of documents or circumventing of SALES invoice or under declaring value, the company and/or it staffs be faced up to 10 times monetary fines and jail of up to 12 months under the GST and Income Tax law. 

News:

https://www.straitstimes.com/singapore/politics/10m-population-not-really-a-ridiculous-number-for-spore-to-plan-for-liu-thai-ker

https://www.bbc.com/news/world-asia-china-57380367

https://en.wikipedia.org/wiki/Political_capital

https://www.straitstimes.com/business/property/value-of-good-class-bungalow-deals-may-be-heading-for-10-year-high

https://www.superyachttimes.com/yacht-news/syt-looks-closer-asian-yacht-market

                - - END - -

[7:00 pm, 12/01/2022] +REACH: Dear Contributors,

We will be closing the chat for today.

Thank you very much for being part of our WhatsApp chat and participating actively.

Goodnight!

Megan 😊

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