16 February 2007
FairPrice announces $5.5 million relief package to cushion impact of GST increase
Supermarket chain will absorb two per cent GST on 400 essentials for six months and give out $1 million Food Vouchers to help needy Singaporeans
Singapore’s largest supermarket chain, NTUC FairPrice (“FairPrice”), is making this Lunar New Year celebration a lot sweeter by announcing its commitment to absorb the two per cent Goods and Services Tax (GST) increase on essentials for six months, starting 1 July 2007. Taking the cue from the government’s focus to help the lower income group, FairPrice will also set aside an additional million dollars to provide for the needy families in Singapore.
The two per cent GST absorption will be for its basket of 400 Everyday Low Price items that include rice, sugar, oil and milk powder. This absorption, together with a gradual phase-in of price adjustment on the remaining products, will cost the supermarket chain an estimated $4.5 million over a six-month period.
FairPrice’s latest initiative is also part of the NTUC Group’s efforts to help cushion the impact of the tax increase for workers and Singaporeans. Says FairPrice Chairman, Mr Ng Ser Miang: “As a labour co-operative with a social mission to moderate the cost of living in Singapore, we have taken the initiative again to absorb the GST increase.”
This is not the first time FairPrice absorbs GST. In 1994 when GST was first implemented, FairPrice had absorbed the tax on all items for one year. Subsequently, when the tax was raised from three to four per cent in 2003 and then to five per cent in 2004, FairPrice had absorbed the tax increase for a basket of 400 Everyday Low Price items. The past few GST absorption exercises had cost the Co-operative about $20 million in total.
In addition to the GST increase absorption, FairPrice is also pledging to hand out $1 million worth of vouchers to help the poor and needy.
“We have thought about the various options for a relief package to help fellow Singaporeans cope with the GST increase. While moderating the cost of living is our underlying objective, we hope to do even more for the lower income. This is also in line with what the government is doing, as reflected in the latest Budget. Hence, besides absorbing the GST increase, we will provide food vouchers up to $1 million to help needy families when the tax increase comes into effect,” explains Mr Ng on how FairPrice’s total relief package will benefit the poor and needy.
Details of the FairPrice Million Dollar Food Voucher scheme will be announced at a later date. Between 2002 and 2004, FairPrice had given out similar amount of food vouchers yearly to help Singaporeans tide over financial crisis.
Last month, when retail prices of vegetables shot up against the backdrop of recent floods in Malaysia, FairPrice had also helped to stabilize prices of leafy vegetables by bumping up its imports from diverse sources.Back