Feb 24, 2014

    'Sin' taxes: Why so high, so fast?

    A DAY after the Budget speech, retiree Choong Kah Yong is sitting at a Pasir Ris coffee shop with a cup of kopi-o.

    He is scanning a newspaper, eyebrows furrowed, when this columnist approaches him.

    Mr Choong, 70, nods in approval of this year's Budget, which was announced by Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam in Parliament on Friday.

    He is particularly pleased with the Pioneer Generation Package (PGP), the Budget's highlight.

    Targeted at Singapore citizens who were 16 years or older in 1965 and who were citizens by Dec 31, 1986, the PGP comprises health-care subsidies, Medisave top-ups and other benefits.

    The package will benefit around 450,000 Singaporeans and cover them for life, without any differentiation of income levels and regardless of future economic circumstances.

    Mr Choong and his wife live in a four-room Housing Board flat with their son's family of three.

    He says: "I have not really done the sums... but from what I have managed to understand, there is something for everyone."

    He is especially pleased with the increase in tax relief for those supporting their parents. This has risen from $7,000 to $9,000.

    The new measures will benefit about 170,000 individuals supporting 208,000 dependants.

    All good, notes Mr Choong, except for one thing.

    At this point, the old man turns grouchy. He gives a little snort and pulls out a pack of cigarettes from the front pocket of his chequered shirt.

    Mr Choong holds it up and asks: "Do you mean to say that I am going to be paying more for this?

    "And I have to pay more for my weekly drink (beer)?"

    Excise duties for cigarettes and manufactured tobacco products have been raised by 10 per cent, while duties on all liquor types have been increased by 25 per cent.

    Mr Choong is more miffed that the increase was immediate.

    "No window period?" he asks.

    A man at the next table calls out in agreement.

    He is having breakfast with two friends and they are more interested in the increased duties than the PGP.

    Mr Gary Loh, 68, a part-time cabby, says in a mix of Hokkien and English: "You today talk, today (the duties) go up. How can like that?"

    He concedes that the "sin" taxes have not been raised for nearly a decade, but adds that he dislikes the suddenness.

    "Give some time lah, like the betting duty," says Mr Loh.

    The betting duty rate on lotteries will increase from 25 per cent to 30 per cent from July.

    And that seems to be the rub for people who were surprised by the duty increases.

    Why so high and why so fast, is the constant refrain.

    I suppose those sin taxes make sense. I neither smoke nor drink, so I don't feel the angst the grumblers do.

    Reduce the incidence of smoking and drinking and maybe, as a nation, we will have to pay less for health care in the future too.

    A suggestion that Mr Loh should consider cutting down on smoking is met with a derisive laugh.

    "How to? I have smoked almost all of my life and, now, you ask me to stop?" argues the man, who smokes one pack of cigarettes every two days.

    His friend, Mr Tan Lai Chuen, 60, who is unemployed, is concerned about how the duties on liquor will affect his pocket.

    "I like a bottle or two of beer every night. We come down after dinner, sit at the kopitiam and chit-chat over drinks.

    "We relax and enjoy the breeze, and now you tell me we may have to pay more," he says with a heavy sigh.

    "Like that 'jialat' (terrible in Hokkien) lah."