GST offset’s objective met?

August 6, 2012

I refer to the GST Voucher cash payout.

Help pay GST?

We should keep in mind that the original purpose of the GST offset scheme was to help lower-income families pay for the GST when it was introduced.

For example, even a lower-income family spending just $1,000 a month, would incur GST of $840 a year.

So, the maximum GST Voucher cash payment of $250, will only cover 30 per cent of the GST that they incur.

Also, for this year, there are no Service and Conservancy Fee (S&CC) rebates, rental rebates or Senior Citizens’ Bonus.

The Ministry of Finance has clarified that each Singaporean household can only make use of one utilities rebate, which is part of the GST Voucher Scheme.

GSTV-U Save rebate enough?

According to the Department of Statistics, the Electricity Tariff price index increased by 40 per cent from 2009 to May 2012.

Since the GSTV-U Save rebate range between $180 – $260 a year, I would like to suggest that in determining this quantum, consideration be given to the electricity tariff increase as well as the GST increase.

For example, a household with a monthly utility bill of $150 in 2009, may be paying around $210 now after the 40 per cent increase.

So, the GSTV-U Save rebate of say $220 a year, would only offset about 31 per cent of the $720 annual increase.

After all, the GSTV was introduced in February this year to help lower and middle-income households with living expenses.

Leong Sze Hian

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About the Author

Leong
Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.