Wednesday, 30 January 2008

OPQ 22 January 2008: GST Revenues

Given Singapore's stellar GDP growth last year, the Government would have collected more GST revenue than originally projected. In last year's Budget speech, the increase in GST rate from 5% to 7% was projected to raise an additional $750 million in revenue. So given that the actual additional revenue raised was $990 million, the Government ended up collecting $240 million, or a hefty 32%, more than the estimate.

Quite apart from the question of whether it was necessary to increase the GST rate in the first place then (which, admittedly with the benefit of hindsight, is an even better question today than it was last year), it is important to ask what will happen to these unexpected GST receipts, as well as the GST credits that were not paid out. I guess we will only know on 15 February.

OPQ

GST REVENUES

4. Mr Siew Kum Hong asked the Minister for Finance (a) what was the actual amount of additional GST revenues collected from July to December 2007, resulting from the increase in GST rate from 5% to 7% from 1st July 2007; and (b) what was the total amount of GST credits paid out in 2007.

The Minister for Finance (Mr Tharman Shanmugaratnam): Mr Speaker, Sir, the amount of additional GST revenue collected from July to December 2007 resulting from the increase in GST rate from 5% to 7% was about $990 million, of which roughly $540 million can be attributed to expenditure by local consumers. The remainder was attributable to spending by foreigners. The additional GST revenue was higher than expected, as consumer spending itself exceeded expectations.

The Government paid out about $630 million to Singaporeans in GST credits over the same period, including the bonus credits that were given to senior citizens.

These figures do not include the various other components of the GST offset package. Overall, besides the overall GST credits, the Government has budgeted to hand out $1.17 billion in total over FY2007 to assist Singaporeans in adjusting to the GST increase.

Mr Siew Kum Hong (Nominated Member): Sir, I have two supplementary questions. It seems that over 97% of Singaporeans living in one- to three-room HDB flats received GST credits or Senior Citizens' Bonus. I would like to ask the Minister what were the reasons for 2% to 3% of these Singaporeans not receiving these credits and what more could have been done to help them to sign up for them. My second question, Sir, is what will happen to the budgeted GST credits that were not paid out? Will they be applied towards other purposes to mitigate the impact of the GST increase?

Mr Tharman Shanmugaratnam: Mr Siew Kum Hong is quite right that about 3% or so of Singaporeans living in one- to three-room flats did not sign up for their credits. Just to put it in perspective in terms of the total number of people who did not sign up for their credits, which is about almost 80,000 Singaporeans, over half of them were Singaporeans living in private properties. Of those who were not living in private property, we also notice that the non-sign up rate is higher amongst those who are of higher incomes. But there was a certain number in the one to three-room flats who did not sign up. Have we tried hard to reach out to them? Yes, we have. From day one, all the way till December, we had repeated publicity as well as outreach efforts on the ground to reach out to these individuals. This has meant not just the publicity through the media, but posters on lift lobbies, customised flyers that go out to each and every household customised to that household, given their housing type and the profile of people whom we think are in the household, repeated flyers that went out in November last year and, finally, grassroots leaders walking the ground going to each and every house where there was a sense they were not signing up. Grassroots leaders tried to reach out to 30,000 individuals in the latter months of last year. So not just the regular mechanisms through the media, websites, etc, but customised posters and, finally, human outreach. We spared no efforts in reaching out to Singaporeans to encourage them to sign up. Some were not contactable, not living at the place where their address is officially recorded. But we tried out best.

On the Member's second question, these are revenues that come back into the Government Budget and are spent on everything else we are spending on, including the very substantial amount of monies being spent on Workfare, on increased healthcare needs and the other areas which Minister Vivian Balakrishnan has just talked about, other areas of targeted assistance for the poor.

5 comments:

family man said...

http://lalaland9.wordpress.com/2008/01/31/please-stop-lying-to-us/

I hope all 80+ members of the parliarment read this.

Siew Kum Hong said...

To family man: Well, I had...

dfadf said...

Microsoft Office
Office 2010
Microsoft Office 2010
Office 2010 key
Office 2010 download
Office 2010 Professional
Microsoft outlook
Outlook 2010
Windows 7
Microsoft outlook 2010

SEO Services Consultants said...

Nice information, many thanks to the author. It is incomprehensible to me now, but in general, the usefulness and significance is overwhelming. Thanks again and good luck! Web Design Company

rocky case said...

Stephen Stapinski

Really your blog is very interesting.... it contains great and unique information. I enjoyed to visiting your blog. It's just amazing.... Thanks very much for the share.