A GOODS and services tax (GST) of 3 per cent was introduced in
1994 to enable Singapore to shift its reliance from direct taxes to
indirect taxes, and to sustain a lower income tax rate.
It was later raised to 4 per cent in 2003, 5 per cent in 2004,
and 7 per cent in 2007.
Middle-income individuals are largely unaffected as income tax
rates have been revised down five times in the past 10 years. This
more or less offsets the increasing GST rate.
Unfortunately for middle-income individuals who have retired,
the Government seems to have ignored how inequitable GST is to
them.
Growth dividends, which are a one-off occurrence, also do not
address the continuing injustice against these retirees.
Individuals living in bigger Housing Board flats receive $600
regardless of whether their assessable income is zero or $100,000.
If the annual value of their homes exceeds $13,000, they receive
$300, even though the annual value does not translate into
income.
The Government should correct this.
David Boey
