Second Reading Speech By Mrs Josephine Teo, Minister of State For Finance And Transport On The Goods And Services Tax Voucher Bill at The Parliament, 14 Nov 201214 Nov 2012
1. Mr Speaker, Sir, I beg to move, “That the Bill be now read a Second time.”
2. In his Budget Statement 2012, Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam announced the permanent GST Voucher Scheme. This Scheme helps lower-income Singaporeans offset the GST they pay on their daily expenses.
3. Since the GST was introduced in 1994, the Government has cushioned its impact by providing various rebates to households. Over the last 5 years, for instance, households in the bottom 20% would have received an average of about $340 per household member, or about $1,300 for a family of four, in temporary GST offsets per year. For a family that spent about $1,500 each month on daily necessities, this would have offset all of their GST expenses. Among median income households, the average amount is smaller at around $230 per household member, which would have helped to partially offset their annual GST bills as well.
4. In this year’s Budget, we introduced the GST Voucher to give certainty to lower-income Singaporeans that they will get continued help to cope with their GST expenses. The Government will also establish a Goods and Services Tax Voucher Fund from which payouts will be made in the coming years.
5. We are setting aside $3.6 billion as part of Budget 2012 and expect this amount to be sufficient to finance the first 5 years of the GST Voucher Scheme. About $680 million will be drawn down for the GST Voucher payments made in Fiscal Year 2012. The Government will inject the remaining monies, currently estimated at $2.95 billion, into the Fund upon its establishment.
6. This Bill provides for the establishment of the Fund and its administration.
Main Provisions in the Bill
7. Sir, I shall now highlight the main features of the Bill.
8. Part II of the Bill sets out the purposes for which moneys in the GST Voucher Fund may be used. Part III of the Bill places the general responsibility for the management and administration of the Fund on the Minister for Finance and provides for the presentation of annual financial statements and Auditor’s report to Parliament. Parts IV and V of the Bill contain general provisions, including regulation-making for carrying out the purposes and provisions of the GST Voucher Fund Bill, and the proper conduct of officers exercising functions under the Bill.
9. Sir, the GST Voucher Scheme is an important feature of our system of taxes and benefits. This system ensures overall progressivity, allowing lower-income Singaporeans to pay considerably lower taxes while receiving significantly more benefits than higher-income citizens.
10. The Government is also committed to making the GST Voucher a permanent feature of our fiscal system. By setting up the GST Voucher Fund, we provide greater certainty of payments which will otherwise be subject to budget availability, depending on economic conditions and other competing priorities in any year. The Government intends to make appropriate injections into the Fund to carry on financing this permanent GST Voucher Scheme.
Mr Speaker, Sir, I beg to move.