Singapore is World’s Most Expensive City – and it is an accolade that we can do without!

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By Fatimah Akhtar

Cheaper, Better, Faster? Hell no, we are the most expensive city in the world. In a hotly debated topic to introduce VAT (Value Added Tax) in the six oil rich Gulf States, the discussants, turned the dialogue to whether essential goods with built-in taxes may make the added tax unjustified.

There are no prizes for guessing here, they looked at Singapore.

The National, a leading newspaper in UAE, a government owned newspaper based in Abu Dhabi, undertook an investigation of consumer goods across a selection of developed economies. The study revealed that Singapore is the most expensive for mass market goods and for essential items such as food and drinks compared to UK, US, Australia and UAE.

It may not come as a surprise to many, luxury goods Louis Vuitton Bag is the cheapest in Singapore.

Below is the Table of Prices (In Dirhams) compiled by The National:

A quick check at NTUC revealed that The National is accurate in its reporting.

Notice that every day food like milk and eggs are double that in UK and US. A so called cheap H&M T-shirt is one of the most expensive. If the volume of milk sold is made equal, the exorbitant price in Singapore is painfully glaring.

UKUSSINGAPOREAUSTRALIAUAE
Eggs (Dozen)6.78.815.612.510
Milk(litres)7.5

(3.8)

8.8

(3.8)

28.90

(3.8)

15.9

(3.8)

19

(3.8)

 

In a city where we replace dollar bills in our wallet from the receipts that we collect from the retailers, DPM Tharman Shanmugaratnam’s assertion that we are not the most expensive city in the world seems to fall flat on his face. He refuted BBC’s report by saying that high prices is a reflection of the pretentious expat living here and “arguably, people with expense accounts don’t spend like the rest of us”. He went on to say, “For ordinary citizens, it was 48th wedged between Lisbon and Pittsburg”. This is rather contradictory, from our research, it is apparent that essential items such as eggs and milk are basic food items, and we are priced higher than our counterparts in UK and US.

The model that is proposed in the Gulf States is worthy of replication in Singapore. Gulf States’ governments have assured that goods that affect the most vulnerable in our societies, will be exempted. They have declared one hundred items that will be exempted including, basic food items, healthcare, essential medicine, education and the sale and lease of residential property.

Another key takeaway is that consumers need and have the right to question policies before it is being implemented. Consumers in Gulf States questioned the validity of VAT as they feel consumer goods have in-built hidden taxes in the first place.

Likewise, Singapore Government should be more detailed in its tracking of basic items and there is a need to rationalize the components that contributes to inflationary pressures and if rental is the component that contributes to high prices. If that’s the case, then policies should be geared to reduce rental prices for a start.

Also, for most developed countries including Gulf States, Government’s cardinal principle is to reduce the tax burden on the most vulnerable.

There is much to be learnt from the other matured economies and more can be done to the underclass in Singapore. GST is a regressive taxation regime and we need policies to build a more equitable society.

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