| 2.67 The GST is an important
and stable source of revenue. At 5%, our GST rate
is among the lowest in the world. Because we have
minimal exemptions, we have kept the overall rate
low and spread the tax burden widely and fairly
among the different goods and services consumed
in Singapore. The result is low compliance costs,
minimal economic distortions, and sustained revenues.
2.68 Some have suggested lowering GST rates on
particular classes of goods or services, such
as food. The purpose is ostensibly to help the
poor, but this is not an effective way to do so.
Most of the revenue lost from such concessions
goes to higher income households, who spend much
more on most items than poorer households, including
necessities like food. A better approach to help
the poor is through focussed programmes targeted
at them, such as rebates on Service & Conservancy
Charges (S&CC), rentals, or utility charges.
This indeed is the Government’s approach.
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