Will the proposed changes in GST and CPF be effective in helping business and society? What can be done to ease the burden on consumers and employers?

THE proposed increase in GST, together with a possible increase in CPF contributions, will raise costs for employers and businesses at a time when GDP growth for this year could be lower. As such, employers and businesses will need to look for help from the government to soften the impact of these higher costs. One way, of course, is to reduce corporate taxes in the upcoming Budget in February. A lower corporate tax rate would be timely as it will help businesses stay competitive.

GST, in general, is regressive and the proposed increase will impact the lower-income families more. It would therefore be good if GST could be exempted or reduced for medical expenses and essential daily items. On the other hand, the government has stated that it will be using the increased revenue to help the lower-income group.

An increase in the CPF contribution rate at this time will also help the lower-income group build up their CPF nest-eggs to meet their medical and housing needs.

- Wee Piew
CEO, HG Metal Manufacturing Ltd