Tan Kin Lian - Perspectives Abolish GST
For the past 20 years, I advocated that GST should be totally abolished for the following reasons:

1. It is unnecessary as the government has adequate tax revenue from other sources
2. It is costly to administer, as it is collected from tens of million transactions every day.

Many people argued that GST is good, but it should not be collected on "essential items".

I asked them to define "essential items". It appears to include food, utilities, education, health, transport and others. Different people may have different ideas of what are essentials (most probably according to their individual situation), but collectively, it does appear to include almost everything.

I asked them to define what are luxury items. They also have difficulty in naming them. One of them said - just tax all income above $20,000 a year.

We have gone round one cycle. We reduced income tax, and introduced GST to make up the shortfall. Now, it seems that we can remove GST and increase income tax.

I come back to my reasoning. The government collects $12 to $15 billion a year from GST. If they scrap the GST, where can they find the shortfall of up to $15 billion?

I believe that our reserves (which is kept as a state secret) is growing by more than $15 billion a year. If we remove GST, the reserves will grow by $15 billion less, but it will still grow. So, it should be possible to abolish GST without replacing it with other revenue.

Why do we need to grow our reserves anyway? It is already more than needed for our future. (This is my guess, as I do not have the actual "secret" figures.)

If we are really short of revenue, our immediate step is to stop wasteful spending. This is another area for discussion. I find many evidence of wasteful spending here and there. We should be more discerning. We may be able to cut several billions of unnecessary spending, if we look out for the opportunity.

Finally, if we are still short, we can introduce an income tax for higher income. These people would be able to afford the additional tax. They are already spending their wealth on expensive houses, cars and other luxury items.

Tan Kin Lian
 

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