GST article!!!

Pub Date: 20/02/2007   Pub: ST              Page: 3
Day: Tuesday
Headline: All about the GST
By: ANDREW DUFFY

BIGATHOME
The five Ws and an H of the hike in Goods and Services Tax (GST). BY ANDREW
DUFFY

WHAT IS GST?
It is the tax we all pay on whatever we buy. Businesses pay it, and customers
pay it. Currently it adds 5 per cent to the cost of everything. In the Budget
last week, the Prime Minister announced that it would go up to 7 per cent.

WHO WILL BE AFFECTED BY THE HIKE IN GST?
Everyone, but poorer people are more affected. This is for several reasons.
For example, poor people tend to earn less and thus have less savings because
most of what they earn goes to expenses. Therefore  as a percentage, more of
their income goes on GST.
That is why the Government wants to help them by giving out Workfare.
Workfare is  a cash bonus to poorer people, who are also working, to boost
their income to make up for the rise in prices caused by the GST hike.
WHY DO WE PAY GST?
A rise in GST will put $1.5 billion into the government coffers annually. That
means it can reduce the corporate tax rate – the amount businesses pay. And
that will attract more big businesses to set up or stay here, and boost the
economy as a whole – so more people should get richer. So it is needed for
Singapore to be globally competitive. Most countries are cutting corporate tax
rates, and raising “indirect” taxes like GST.

WHERE ELSE DO PEOPLE PAY GST?
It is more a question of where they do not. In Asia, for example, only Hong
Kong, Malaysia and tax-free Brunei have no GST. And in other countries it is
much higher. For example, in the United Kingdom it is 17.5 per cent. Plus it is
more complex there; for example, hot takeaway foods are taxed at 17.5 per cent,
but cold foods are not. Bread is considered cold, even if it is warm. That
makes things so complicated. Singapore has decided to have a more
straightforward GST on everything.

WHEN DID GST START IN SINGAPORE?
GST started in France in the 1940s. In Asia, it was introduced by South Korea
in 1976, followed by Taiwan and Indonesia in 1985. Singapore GST started in
April 1994, at 3 per cent. The rate was raised to 4 per cent in 2003 and 5 per
cent a year later. And this new hike would not be the last, as Singapore has to
adapt to stay competitive.

HOW WILL GST REVENUE BE SPENT?
It will allow Singapore to help its lower-income earners, plan for its ageing
population and invest in infrastructure like new roads and bridges. It will
also boost health care and education; the plan is that through education,
children from low-income homes will go on to higher-paying jobs.

GST!!!

There has been a proposed increase in the goods and services tax, from the initial 5% to 7% from the 1st of July.
And this is going to happen at one go, not in steps like the previous increase.
Although an increase of 2% does not seem much to us for the time being, we will be able to feel the effects of this increase in the long run. Just take a $100 purchase for example. There will be an increase in price of $2 with the increase of 2% in GST.
I feel that the worse part of this increase is the fact that it applies to everything, be it luxury items or daily necessities. Everyday spending will be affected and those families that cannot cope with this increase would be the hardest hit.
The government has increased the GST in order to reduce corporate tax. This was a measure done to attract companies to invest in Singapore. In doing so, they hope to develop Singapore's economy.
But doing this at the expense of Singaporeans? I do not agree.
However, the only suggestion that I have found to be more agreeable is to not increase the GST on essential goods (rice, salt, sugar, edible oil, soya sauce, vegetables, flour and fish). It is only logical, in my opinion, to instead increase the tax that people have to pay for luxury goods (such as shoes and bags). Why should the people of Singapore be taxed more for their daily needs?
Looking back at that suggestion, I find a major loophole. If these people are able to buy these luxury goods, nothing is stopping them from buying these goods from overseas where the tax is lower. After all, budget airlines do provide cheap air flights to nearby countries. The GST increase on these goods would therefore be redundant and the amount earned from the GST would not be enough for the government's social spending.
I think that the government's proposed offsets for this increase are fair in that sense for the time being. But the GST increase will be permanent and will not decrease. Singaporeans still will spend more than the offsets in the long run.
According to the article, everyone but the poorer people will be affected. I agree with this statement to a small extent. I feel that the rich will not be that affected as well as the increase would not be that significant to them. The people that would suffer most would be the middle class Singaporeans as their spending on necessities is a large percentage of what they earn.
With that, I end off with this. The government has put a lot of planning into the GST hike and there must be reasons for that. Whether or not I agree with these reasons, it is only my opinion, and there is nothing I can do about it. Well, we'll see how this hike affects Singapore then!

The ARTICLE

Pub Date: 09/02/2007   Pub: BT              Page: 1
Headline: Former NKF directors give up fight, concede to judgment
By: Michelle Quah
Corporation: National Kidney Foundation, NKF
[SINGAPORE] Former board members of the National Kidney Foundation (NKF) have
thrown in the towel - admitting they breached their duties as directors - and
have now opened themselves up to millions of dollars of claims filed against
them by NKF's new board.
  After months of battle, a few days on the stand was all it took to persuade
former NKF chairman Richard Yong and his fellow defendants in a civil suit -
former NKF treasurer Loo Say San and former NKF board member Matilda Chua - to
give up their fight just as former NKF chief T T Durai did a month ago.
  All four had been sued by the new NKF board, headed by chairman Gerard Ee,
for $12 million damages - for improperly paid salaries and contract fees and
loss of donations, among other things. How much each defendant will have to pay
will be assessed at a damages hearing later.
  Until then, yesterday's admission by Mr Yong, Mr Loo and Ms Chua is the
closest thing to victory for the new NKF board, which filed its suit in April.
  In a statement to the media, Mr Ee said NKF had to pursue the civil suit to
safeguard its reputation and integrity.
  'We are very pleased at this outcome and, in particular, at the speed with
which this has been achieved,' he said. 'The outcome helps vindicate the sense
of justice among Singaporeans.'
  The defendants' admissions yesterday came mid-way through what was expected
to be a two-month hearing in the High Court. Asked what prompted their move,
their lawyers declined to comment.
  But the new NKF board's representative, Senior Counsel K Shanmugam, said Mr
Yong's admissions on the stand in the past few days proved a turning point in
the case.
  Among other things, Mr Yong admitted he lied and breached his fiduciary duty
as a director.
  Mr Shanmugam said: 'I felt that, after two days of cross-examination, the
admissions by Mr Yong were quite damaging - and I could see at that point that
it would have been sensible for the defendants to have ended this hearing. That
admission of his breach of fiduciary duty was fatal.'
  Mr Shanmugam told reporters that following Monday's court session when Mr
Yong admitted breach of duty, he decided to call Mr Yong's lawyer Peter Low.
  'I felt I could make the point to him that there was no sense in continuing
this case,' Mr Shanmugam said. 'They thought about it, and consented.'
  Mr Shanmugam said that soon after, Ms Chua's lawyer Cheah Kok Lim got in
touch and expressed his view that Ms Chua should consent to judgment.
  Mr Yong, Mr Loo and Ms Chua's climb-down echoes that by Mr Durai last month.
  NKF's former chief executive seemed prepared to defend claims against him,
but abruptly threw in the towel just two days after the hearing began -
immediately after Mr Shanmugam concluded his opening statement to the court.
  Now that all four defendants have consented to judgment, the amount each
will have to pay will be assessed at a separate hearing to be held within 12
months or so. They will each be assessed differently, based on their levels of
liability.
  'I can confirm at this point that Mr Yong faces more liability than Mr Durai
- he will bear the brunt of the claims,' Mr Shanmugam said. Mr Loo and Ms Chua
face a lower-level liability than Mr Yong or Mr Durai, he added.
  Mr Yong and Mr Loo will now continue to pursue their own claims against five
third parties. They earlier dragged four other former NKF directors and Mr
Durai into the civil suit, arguing that all directors were equally liable.
  Mr Yong and Mr Loo's other lawyer, Chia Boon Teck, told reporters yesterday
that even though his clients have settled their case with the new NKF board,
they will continue their claims against 'at least one of the third parties'. He
declined to say which party, but the indications are that Mr Yong and Mr Loo
will proceed against Alwyn Lim, who they named extensively in their defence.
  Lawyers for the third parties said yesterday they feel confident about their
respective cases - even more so after the defendants' consent to judgment
yesterday.
  The various parties will meet in Judicial Commissioner Sundaresh Menon's
chambers at 4pm today to discuss how to proceed with the third-party claims.

 

Return of the NKF

After months of battle in court, the former directors of NKF have finally thrown in the towel, admitting their breach of duty as the directors of a well-known charitable organization.
But my concern today is not about their acknowledgement of their wrongs. Instead, I would like to reflect on the causes of their wrongdoing and the consequences of such a mistake.
I feel that main reason for their lack of integrity was purely based on the flaws of human nature. We all know that as imperfect human beings, there is always a chance for temptation, corruption etc. to overpower our conscience, leading to humans doing unimaginable things. Temptation caused the fall of man from the Garden of Eden.
And signs of temptation have or will never, now or in the future, cease to exist.
We put so much emphasis on integrity of the common man. Few people question the integrity of the leaders at the top of the ladder.
This NKF saga, in my opinion, would bring about a total change to that mindset for Singaporeans. Then again, I question the good that this change would bring. Would it be good for Singaporeans to live with no trust in anyone (of such charitable organizations for example) ever again? What good would it do for the people that actually needed the help that the organization "provides"?
Our society may well be a well-off one. However, there are still some people that are at the lower end of this balance. I have seen some of these cases. Old, lonely people, living in half-room flats in some obscure district of Singapore that many people definitely would not know about is just one example of such a imbalance.
Going back to the issue of NKF, we all know that dialysis is expensive and some people do need our help in sustaining their lives. Is the NKF saga going to change any mindsets of people? I think no. Looking at the initial uproar to this issue, many people felt cheated of their money and most likely felt inclined never to donate to such an organization every again. I know, because that was my first reaction to this situation. As a keen watcher of the NKF charity show almost every year, I have found myself donating countless times and who could forget the NKF cards that we had almost every year.
That was initially. Now after much of the reaction died down, I think that many people would have realized that there are many people that need our help.
This issue is not about the people involved, but how the people surrounding the issue react to it.
This issue is not going to change the way I feel about helping others.
Neither is it going to stop me from donating to the reformed NKF.