The Business Times
LETTER TO THE EDITOR
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Yes to raising GST rate, but later; other alternatives exist

Published Tue, Apr 13, 2021 · 05:50 AM

I REFER to the article by Danny Quah ("The case for a 9 per cent GST", The Business Times, April 7)

Mr Quah made the case for raising the current Goods and Services Tax rate from 7 per cent to 9 per cent. He said that raising the rate will increase tax revenues; that GST will become the leading generator of tax revenue in Singapore; that the tax increase does not distort the market and would avoid problematic issues surrounding income tax; that GST is inherently neutral to foreign trade; that GST is a relatively easy tax to administer and enforce. He also said that the GST targets consumption rather than savings and investment, and that the burden of the tax increase to the lower-income group can be balanced out by providing more relief to these people through the issuance of GST vouchers.

He has, on the surface, made a compelling case for the GST rate increase to raise additional revenue. However, I would like to propound some alternative perspectives.

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