PUBLISHED ONJanuary 10, 2024 9:25 AMByChing Shi JieSenior Minister of State for Finance Chee Hong Tat has called Workers' Party (WP) Member of Parliament (MP) Jamus Lim out for "claiming credit for what others have done".
This comes after several supermarkets and retailers recently announced that they would be absorbing the one per cent GST hike for essential products - something that Lim claimed he and fellow WP MP He Ting Ru had previously suggested in Parliament.
"But the idea was pooh-poohed as infeasible," the MP for Sengkang GRC said in a Facebook post on Tuesday (Jan 9). "The fact that chains like Giant, Changi Airport, and even FairPrice have chosen to do so is demonstrable proof that it is not only possible, but something consumers want.
"The decision by the government to sidestep this commonsensical idea is, in my view, an abdication of leadership on the economy."
During the February 2022 Budget debate, He in Parliament said that the government should consider allowing exemptions on GST for essential items such as food supplies, healthcare and care services, including childcare.
She added that it is something that other countries such as the UK, Australia and Japan have already adopted.
And in November 2022, Lim said that it is "irresponsible" for the government to increase the GST amid the uncertain inflation outlook and higher prices.
On Wednesday (Jan 10), Chee, who is also acting Transport Minister, wrote on Facebook that he was "puzzled" by Lim's social media post.
Chee said: "Lim claimed that the discounts are what he and He Ting Ru had suggested in Parliament. This is factually inaccurate.
"What he and Ms He had proposed was an exemption of GST by the government for what they deemed as 'essential goods', and not about retailers choosing to temporarily absorb the GST increase on their own accord."
Chee said that Deputy Prime Minister and Finance Minister Lawrence Wong had previously explained why GST exemption by the government for "essential goods" is ineffective as "the line between essentials and non-essentials is often ambiguous and unclear".
At the November 2022 debate to amend the GST, Wong cited a BBC article about the Indian system, where there was a court challenge by a pizza toppings firm to have its mozzarella topping classified as cheese, which had a GST of 12 per cent.
The court disagreed, arguing that because the topping had other ingredients such as vegetable oil, it should be taxed at 18 per cent in a class known as “edible preparations”.
There is no end to such challenges, said DPM Wong, adding that while a tiered GST system sounds good on paper, studies by numerous governments and organisations concluded that it ends up benefiting the well-to-do, who spend more overall, including on essentials.
"Contrary to what Lim claimed, the government is open to the idea of retailers absorbing the GST increase if they choose to do so," Chee said, pointing out that Minister of State for Trade and Industry Low Yen Ling and her Committee Against Profiteering (CAP) members have been "tirelessly engaging" supermarket chains and merchants to offer discounts and other offers.
"This behind-the-scenes work is what benefits our people, through concrete actions and outcomes," Chee added.
Last November, FairPrice announced that they would absorb the one percentage point increase in GST for some daily essentials for the first half of 2024.
They comprise national brands and house-brand items, and include fresh produce, staples, dairy, meat, paper products, detergents and household cleaners.
And in December last year, supermarket chain Giant said that they would be absorbing the GST hike on 700 essential products across its key categories, including "fresh and grocery", "personal care" and "household essentials".
In his Facebook post on Wednesday (Jan 10), Chee said that the "fairer and more effective" GST system in Singapore means that lower-income households pay a much lower effective GST rate than higher-income households.
He added: "Lim should not misrepresent the debates in Parliament and claim credit for what others have done. That is disingenuous and misleading.
"While we welcome different points of view on public policy, we must ensure that our political discourse and debates are conducted with integrity and honesty."
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