GST Voucher: Less money to less people?

gst-voucher

Is the GST Voucher adjusted for inflation every year since the GST rate was increased in 2007?

I refer to the article “$1 billion worth of GST Vouchers, MediSave top-ups to benefit 1.6 million Singaporeans” (Straits Times, Jun 28).

It states that “will be one of 1.6 million Singaporeans set to benefit from goods and services tax (GST) benefits and MediSave top-ups – worth a total of $1 billion – which were announced on Thursday (June 28)

… About 1.39 million Singaporeans will receive up to $300 in GSTV-Cash in August.”

More help for lower-income in 2007?

When the GST rate was raised from 5% to 7% in July 2007, a household in the bottom 20% had to pay additional GST of $370 per year, but received an offset package of $910 per year, in addition to permanent benefits of $1,000 per year. (“Budget debate round-up speech“, Mar 2, 2011)

Less help now?

Reading the subject Straits Times article – it would appear that the GST Cash for this time – is up to a maximum of $300 per adult.

As to the Medisave top-up for those age 59 and above , it can only be used for approved medical expenses and insurance premiums, and is thus not cash that can effectively offset GST expenditure.

So, after adjusting for inflation since 2007, are lower-income families arguably, effectively getting less now under the GST Voucher scheme, compared to the previous GST Offset Package?

2.1m dereased to 1.39m – get GST Cash voucher now?

In 2012, the media reported that 2.1 million Singaporeans would get GST vouchers (“2.1 million Singaporeans to receive GST Vouchers”, Asiaone, Jun 30, 2012).

So, why has the number getting GST Cash vouchers apparently decreased by 710,000 (2.1 million – 1.39 million) Singaporeans or 34 per cent, to 1.39 million now?

Leong Sze Hian

About the Author

Leong
Leong Sze Hian has served as 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), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.