SICCI urges 'selective' application of GST hike to ease strain on businesses

WITH the implementation details of the Goods and Services Tax (GST) increase expected in Budget 2022 later this month, the hike should be "selectively" applied so that businesses do not face a sudden increase in expenses.

This was the view of T Chandroo, chairman of the Singapore Indian Chamber of Commerce and Industry (SICCI), in one of his many proposals to Finance Minister Lawrence Wong on behalf of the chamber. Wong is due to deliver this year's Budget in Parliament on Feb 18.

In a media release on Thursday (Feb 3), Chandroo said the GST hike of 2 percentage points might dampen consumer spending in critical areas such as retail and food and beverage (F&B) sectors that would affect many small and medium-sized enterprises.

"As the supply chain is being restructured globally, too much money running after too few goods may not bode well for the economy," he added.

Chandroo also recommended that the government make it mandatory for companies to pay a proportion of utilities bills for their employees who are working from home.

"This move will encourage more workers who can work from home (to do so) and help reduce (Covid-19) transmissions in the community," he added.

Meanwhile, with the pandemic still raging on, Chandroo urged the government to not be hasty in discontinuing many of the help schemes introduced in recent Budgets.

Schemes like the Jobs Support Scheme and waivers to rentals may be required for another 9 months, and these can be "progressively lifted", said Chandroo.

He also listed several other tax recommendations, among them a surcharge on income taxes on taxable incomes exceeding S$1 million a year, and tax holidays for companies building eldercare facilities.

On green technology, he suggested a tax rebate of 2 to 3 years to write off the cost of leasing an electric car. He also called on Singapore's authorities to work closely with Malaysia to ensure that electric cars entering Malaysia have facilities to charge during the journey.

Calling for more engagement with the corporate community in implementing the Singapore Green Plan 2030, SICCI wants more dialogues with firms in the business of green technology to gather their views so that the Green Plan can reach every corner of society.

Manpower shortages, another major issue facing businesses today, can be countered by reskilling and attracting the "silver generation" or older workers back into the workforce, as well as expediting the entry of foreign workers from more countries, noted Chandroo.

"Restaurants in the F&B sector and ancestral trade (flower-making for weddings, funerals) are facing a labour shortage," he said. "In these difficult economic times, SICCI recommends a relaxation of entry rules for such workers."

Another measure Chandroo put forward is to develop flexible employment schemes, such as outsourcing work to Singapore-based companies who can provide "skills-ready" employees for varying periods of time - for example, 6 months to 2 years. This may reduce the reliance on overseas labour and disincentivise companies from shifting their operations abroad, he added.

Get the latest updates on Budget 2022 here: bt.sg/budget22

Read more: 

• Some business leaders in favour of raising GST in 2 steps to soften impact on households, businesses
• MAS tightening monetary policy paves way for GST hike: economists
• Manpower shortage a key concern raised by business leaders at pre-Budget roundtable