Should we be grateful for the scrapping of the TV licence?

March 4, 2011
Singapore Democrats

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We have been paying billions of dollars in RTV fees all these years for nothing. Now that it wants to score some cheap political points before the elections.Singapore Democrats 

The Government announced in its Budget the radio and TV licence (RTV) fees will henceforth be abolished. This means that Singaporeans will no longer have to pay $110 a year for the TV licence and $27 for a radio licence.

In his announcement, Minister for Finance Mr Thraman Shanmugaratnam said that the requirement for a TV licence had lost its “relevance.”  Rather than rejoice at the announcement, Singaporeans should sit up and pay attention to the Minister’s choice of words.

 

 
When exactly did the licence lose its relevance? It must have been sometime in 2010 because in the last Budget, the licence was obviously still relevant because it was still in place.

What changed between then and now? The Minister didn’t say.

Was it the introduction of the pay cable TV that made free-to-air channels irrelevant? Obviously not, because cable has been around for many years and during all this time, the Government still held that the TV licence was relevant.

Is it the Internet then with people turning more and more to cyberspace for entertainment and news? For the same reasons, the answer is no. The Internet came into being many years ago and if it were the reason for abolishing the RTV fee, action would have been taken long ago.

So what really triggered the change in the Government’s mind? The truth is nothing – at least, nothing logical.

The reason Mr Tharman chose to do away with the RTV fee this time around is political. The PAP knows that, especially of late, resentment against it by the electorate has been building up. In order to assuage the problem, it abolishes a tax that has long made no sense and then trumpets the party’s munificence. 

To this end, Singaporeans must wise up and see through such shenanigan. Being grateful for removing the RTV licence is like thanking the guy for beating his wife only on weekends instead of everyday.

The PAP has no reason to levy this tax in the first place, it didn’t for many years. Malaysia abandoned the fee more than 10 years ago.

No, Singaporeans must not be duped. Instead, this episode should prompt us to sit up and ask what other taxes is the Government collecting that is unncessary and without justification.

A few come readily to mind. Let’s start with the ones on cars. Presently when one buys a car the Government imposes four separate taxes on it:

  • Road Tax (RT): $500 upwards, payable annually, depending on size and age of car
  • Registration Fee (RF): $1,000
  • Excise Duty (ED): 31% of the car’s import price
  • Additional Registration Fee (ARF): 140% of the car’s open market value (OMV)

Ostensibly, such taxes are are levied to control the car population. By levying such taxes, the PAP tells us, we discourage car-ownership and keep our roads less cluttered. What it doesn’t say is that the Government already places a cap on the number of new cars that are allowed on Singapore roads each year.

Such control makes jacking up of car taxes quite superfluous. Removing the ARF for example would not change the number of new cars entering Singapore because the Government already has a limit on it. Yet such a move would save a car buyer tens of thousands of dollars.

Similarly, the road tax can be reduced substantially because motorists are already paying a hefty sum through the ERP system. What the PAP has done is to introduce a new mechanism where it collects revenue from road users but has kept the old one in place even though its rationale no longer exists.

We have been paying billions of dollars in RTV fees all these years for nothing. The PAP Government collects approximately $130 million every year just from the RTV fee – no small chunk of change. Now that it wants to score some cheap political points before the elections, it suddenly dawns on them that the fee is quite irrelevant.

Singaporeans should not be grateful. We should be asking for a refund instead.