“Mr Tharman said the bulk of GST is collected from higher-income groups and foreigners, so cutting the rate would benefit them more.
He said that based on 2010 collections, the bottom 20 per cent of Singaporean income earners contribute only about 4 per cent of all GST paid, while the bottom 60 per cent contribute roughly 16 per cent.”
ST Mar 03 2011
Last Saturday on the CNA political forum Finance Minister Tharman again argued that GST for staple should stay as it is to help the poor echoing his parliament speech on 03 March and by PM Lee statement when he was Finance Minister in 2003.
Up till now I still cannot make sense to this argument put for by these two multi millionaires who are suppose to be quite bright.
Firstly how much collected from GST are channel back to the poor? Nobody know.
Secondly it is only logical to cut GST for Staple product. Rich people don’t eat more rice then the poor. Yes they do eat better food at high end restaurants but the money spent on basic necessity should be the same for all, both rich and poor.
We are not asking for the GST to be cut across the board but let it remains for luxury item like air tickets, restaurant, branded goods and be eliminated from the staples.
So since the riches spent lots and lots on high ends stuff then the high income earners are indeed paying more GST.
Tharman argument for foreigners paying for GST is not 100% too especially if the go the GST rebates before the leave the country.