THE Singapore Retailers Association (SRA) has revealed that it appealed to the Government late last year for a drastic cut in the goods and services tax (GST) from 7 per cent to 2 per cent - as a way to encourage shoppers to get spending.

Earlier this month, Finance Minister Tharman Shanmugaratnam ruled out a GST cut, telling Parliament it would not have the major impact on consumer spending that some believed it would.

Still, the SRA says it intends to 'keep trying' to persuade the Government. SRA executive director Lau Chuen Wei, who yesterday disclosed SRA's approach to Mr Tharman last November, disagrees with the minister's point.

'It's possible that the psychological impact of a rate cut may be greater than the fiscal impact for the shopper. Because what do people do with extra cash in difficult times? They put it away and it doesn't translate into shopping dollars.'

SRA has since proposed another way of getting what it wants: a system where retailers could give 5 per cent of the GST back to the consumer as a rebate.

This could take the form of shopping vouchers, with validity dates, to 'force them to come back to shop', said Ms Lau.

Some retailers have, in fact, taken matters into their own hands.

A Marks & Spencer advertisement in The Straits Times yesterday said the store will absorb the GST on all apparel for three days, till Sunday. Department store Robinsons had also announced earlier that it would absorb the GST till Sunday.

Ms Lau said SRA will 'monitor this situation' to see if it will strengthen the association's case for a rate cut.

MICHELLE TAY

This article was first published in The Straits Times.