Vouchers offset over 90 per cent of GST paid by lower-income households in 2013

Over 90 per cent of the Goods and Services Tax (GST) paid by lower-income households by income was offset by GST vouchers in 2013. -- TNP FILE PHOTO: AUDREY TAN
Over 90 per cent of the Goods and Services Tax (GST) paid by lower-income households by income was offset by GST vouchers in 2013. -- TNP FILE PHOTO: AUDREY TAN

Over 90 per cent of the Goods and Services Tax (GST) paid by lower-income households by income was offset by GST vouchers in 2013.

These households also receive benefits in other areas such as education, housing and healthcare which are "far more than the taxes they pay".

This was revealed by Senior Minister of State for Finance Josephine Teo in Parliament on Monday, in response to a question from Non-Constituency MP Gerald Giam.

He had asked what percentage of GST paid by the lowest 20 per cent of households by income had been offset by all forms of GST Vouchers on average in 2013.

For these households, regular GST vouchers offset about half the GST they pay, replied Mrs Teo. If the one-off GST voucher special payment announced in Budget 2013 is included, the benefits from the GST voucher scheme cover over 90 per cent of the GST paid, she added.

She also stressed that the GST voucher scheme is not the only form of rebate on the GST paid by lower-income households.

"The GST voucher is part of a progressive system of taxes and benefits that ensures that lower income households get back far more benefits than the taxes they pay, including GST," said Mrs Teo.

"These include childcare subsidies, financial assistance from school til tertiary education, workfare, special and additional housing grants, and healthcare subsidies. The GST that they pay is hence far more than offset by the benefits they receive."

In response to Mr Giam's follow-up question about the Government's philosophy behind the scheme, Mrs Teo said that the idea behind the GST voucher permanent scheme was to ensure some form of permanent support for lower income households who pay GST.

"It does exist as part of a broader set of benefits that are provided to different households. It is within this context that the GST scheme is designed, so we look at the benefits that are provided to households holistically," she added.