GST is unnecessary for Singapore

I have always considered GST to be unnecessary and unsuitable for Singapore since its introduction many years ago. Here are my reasons:

a) GST is a wasteful and inefficient method of collecting tax. It requires every transactions to be counted. Each person handles many transactions every day. It cause a lot of work for consumers, business, and tax collectors.

b) It is better to collect adequate tax using the income tax system. Collecting tax by GST adds another layer of administration.

c) Singapore already had an efficient system of collecting tax from income, property, workers levy, vehicle taxes (ERP, COE) and land premiums. There is no need for GST as the government already collected sufficient tax for its needs.

d) Singapore does not spend much on social welfare. There is no need to collect GST to fund the government expenses, unlike other countries that have high welfare benefits.

e) Introducing GST to reduce corporate and personal tax is a bad strategy to attract high income people to move their tax base to Singapore. It takes tax away from other countries and will cause them to retaliate.

f) Giving GST offset to low income people to compensate for GST on essential products is creating unnecessary work and confusion.

The accountants and bureaucrats like GST because it means more business and jobs for them. But this wastefulness has to be paid by the rest of the economy, and in the higher cost of living and a more stressful life.

I understand that Hong Kong does not need to introduce GST. Like Singapore, the government collects sufficient revenue from land sales.

I spoke to a businessman recently. His family had developed a large distribution business in Singapore for over 40 years. They scaled down their operation recently and moved to another Asean country. One of the contributing factor is that GST has made Singapore uncompetitive as a shopping destination.

I know that the Government will not remove GST. But I will still like to point out that it was a mistake for Singapore to introduce GST (and reduce income tax) in the first place. It is one factor that led to our economic decline.

Tan Kin Lian

From Wikipedia - GST in Hong Kong
Goods and Services Tax (GST) was a proposed Value Added Tax in Hong Kong. Consultation over a period of nine months was launched on 2006-07-19 and stirred considerable controversy.

It launched a fierce debate amongst local taxpayers, lawmakers, journalists, politicians, who hotly debated the need for the tax, and the shape any taxes should take. The plan to levy GST was dropped on 2006-12-05.

http://en.wikipedia.org/wiki/Goods_and_Services_Tax_(Hong_Kong)