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The Goods & Services Tax (GST) will increase again by 1% in 2024 to 9%. If you have been reading the news, this is a controversial point that ignites passionate debates in many quarters. After all, who likes paying higher taxes? And no government takes pleasure from announcing tax hikes either. In this raging debate, as Catholics, we can turn to our tradition to help encourage conversations revolve around the questions that really matter.
Now, there are two main considerations in discourses about tax. The first is the act of paying tax itself. Many people, especially those who belong to the school of neoliberal economics, often say that taxation is theft. Why should a portion of an individual’s hard-earned money be taken forcefully by the government? Does the government even have the right to do so?
On this, the Catholic social teaching is clear. In the Compendium of the Social Doctrine, it is said that “the payment of taxes” is ”part of the duty of solidarity” so long as there is “a reasonable and fair application of taxes and “precision and integrity in administering and distributing public resources”. And what is solidarity? Pope St John Paul defined it as “a firm and persevering determination to commit oneself to the common good; that is to say to the good of all and of each individual, because we are all really responsible for all”.
From this perspective, paying taxes is a necessary duty that rightly involves real personal cost in the effort to make society a better place for all of God’s children. Moreover, this is not unfair because each one of us has been able to live and grow in a conducive environment because of the contributions of those before us.
The second consideration is the effectiveness of taxation. As noted above in the Compendium, the Church is in full support of paying taxes so long as the process is fair and the use of that money is not wasteful.
But for evaluation of efficacy, we must consider the objectives. The Singapore government’s main intent for raising the GST is to support vulnerable groups at a time of rising costs. The idea is to help the elderly and families in need through healthcare subsidies, childcare support, and early childhood education. The merits of these goals are difficult to contest. After all, we do want those in need to be helped. As shown earlier, the Church even says that it is our duty to do so.
The concern often raised by opponents to the measures, however, is that if cost of living gets even higher because of the tax hike, low-income workers and families will be disproportionately affected because they are already struggling to make ends meet. It would make no sense to raise tax to support some vulnerable groups at the expense of other vulnerable groups.
To this point, the Singapore government has said that in addition to multiple cash payouts and subsidies every year to families that earn below certain thresholds, it is working on more financial support. The aim of these subsidies is that it will counterbalance the effect of GST hike for eligible persons and households so that it is almost as if GST never went up for them.
Of the many questions and complaints raised, I think this is the true crux of the debate. Is the follow-up support truly sufficient to counterbalance the impact of GST on vulnerable groups? Is the financial amount sufficient? Is the threshold for eligibility of support including enough workers and families?
Jesus said to give Caesar what belongs to Caesar and to give God what belongs to God. This has often been interpreted to mean that Christians are called to be good citizens. We have much to give to our society as Church if we can help our fellow citizens to be more thoughtful and productive in important discourses like this. Let us begin by encouraging concerned people in our circles to focus on the important questions and not the distractions.
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Prepare to pay more for GST in 2023 and beyond (CNA, 14 Jan 2023)
Erwin Susanto is a staff member of Caritas Singapore. He enjoys arcane discourses on Old Testament/Hebrew Bible in the context of the Ancient Near East. He also enjoys thinking about all kinds of contemporary issues and sometimes wonders if punditry is fun.