GOODS AND SERVICES TAX (Amount collected)

Mr Ling How Doong asked the Minister for Finance what is the total amount of Goods and Services Tax collected from April to December 1994.

Dr Richard Hu Tsu Tau: The total amount of GST collected from April to December 1994 is $1.11 billion. However, this figure pertains only to gross collection less any refunds made up to December 1994. It does not include $62.9 million worth of claims for input tax refunds, which are being processed by IRAS. After allowing for this potential refund amount of $62.9 million, the estimated GST revenue is $1.047 billion.

The GST collection for 1994 has already exceeded the estimate of $960 million quoted in the 1994 Budget Statement, because of unexpected high economic growth. The $960 million was estimated based on the Private Consumption Expenditure (PCE) figures of 1992, adjusted to 1993 and 1994 levels. The estimate assumed nominal GDP growth rates of 7.5% for 1993 and 8% for 1994. Actual nominal growth rate in 1993 turned out to be much higher at 13%, while Ministry of Trade and Industry has projected nominal growth in 1994 to be around 14 - 15%.

On the other side of the coin, the value of the GST rebate/offset package has also increased substantially beyond the $1.2 billion estimate announced in the 1994 Budget Statement. This is because the reductions in personal and corporate income taxes are highly buoyant, that is, their value increases sharply with higher GDP growth.

The Government remains committed to implementing GST in a revenue negative manner in the short run, and in a revenue neutral manner in the long run.