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For years the Singapore Democrats have been calling for the GST for basic foodstuff such as rice, oil and sugar as well as medicines to be abolished. This is because such a tax is regressive disproportionately hurting the poor. To make up for the loss in tax revenue, the SDP proposes that luxury items be taxed at 10 percent GST.
Finance Minister Tharman Shanmugaratnam did exempt certain items from the GST last Friday when he unveiled the Budget. He decided to remove the GST for gold and other precious metals!
The Minister started off by assuring that the Budget was aimed at creating a “fair system of taxes and benefits”.
Then he declared: “Investment–grade gold and other precious metals are essentially financial assets that are actively traded and are just like other financial instruments that do not attract GST. I will therefore exempt them from GST.”
The move, according to the Minister, is to facilitate the development of gold trading in Singapore. This would lure even more asset managers to Singapore in our frenzy to turn this island into a financial centre.
With wealth disparity getting bigger and bigger, the tax system should be adjusted to become fairer towards the poor. Many countries have removed the GST for basic necessities so that those at the bottom of the economic scale are not unduly burdened.
Everyone – from billionaires to the homeless – has to eat. A 7 percent tax on food affects someone earning $1,000 a month much more than it does his neighbour earning $10,000.
But despite evidence that demonstrates that removing the GST for essential items would significantly benefit the working-class and help level up society, the PAP has steadfastly refused to do so.
Instead, it chooses to abolish the GST for gold and other precious metals which only the rich are able to afford to deal in. Do rich people in Singapore look like they are in need of more help from the Government?
This is symptomatic of the policy direction of the PAP. It remains callous to needs of the people who most need state support while paying meticulous attention to the wants of those with wealth and power.
It is a Government that has lost all sense of decency.