Help low-income families cope with GST hike

The most talked about item in this year's Budget is the Goods and Services Tax (GST) hike. I, too, share the sentiments of many about the impact this will have on lower-income families, especially their expenses on necessities.

Perhaps the Government will be able to offer GST discounts to lower-income families when the new 9 per cent GST kicks in. Here is how it can go about doing so.

Between now and the end of 2020, the families that would be most badly hit by the hike should be identified.

Over the two years, these families would be required to send copies of their expenses on necessities. The two-year period would allow the authorities to understand the spending patterns of these families.

When the new GST kicks in, the Government could provide a card to these families giving them discounts on necessities, based on a reasonable spending pattern deduced through two years of data collection.

Of course, the authorities should clearly define items that are necessities and evaluate a reasonable quantity of such items per family.

It helps when policymakers show that they truly understand the needs of the people by going the extra mile to mitigate the impact of a new policy on those who are struggling to make ends meet.

Joseph Wong Yong Lye

A version of this article appeared in the print edition of The Straits Times on February 24, 2018, with the headline 'Help low-income families cope with GST hike'. Subscribe