Finance Minister Lawrence Wong announced that the Goods and Services Tax (GST) rate will go up from seven per cent to nine per cent in two phases. It will first increase from seven per cent to eight per cent on Jan 1, 2023 and then increase from eight per cent to nine per cent in 2024.
Singapore first announced a planned two percentage point GST increase from seven per cent to nine per cent in 2018, but it was delayed due to Covid-19.
Mr Wong said he had carefully considered the overall situation – the ongoing pandemic, the state of the economy, and the outlook for inflation, on the timing of the GST increase.
“Our revenue needs are pressing. But I also understand the concerns that Singaporeans have about the GST increase taking place at the same time as rising prices,” he said.
Measures to cushion GST impact
Mr Wong said that the GST will continue to be absorbed for publicly subsidised healthcare and education. The government will also provide town councils with an additional S$15 million per year to absorb the additional GST payable on service and conservancy charges.
The biggest support measure will come in the form of enhancements to the Assurance Package, first announced in Budget 2020.
That year, then Finance Minister Heng Swee Keat had announced under the S$6 billion package that all adult Singaporeans will get cash payouts of between S$700 and S$1,600 over five years. The government said that most households will get enough to offset at least five years’ worth of additional GST expenses.
Join us in supporting the best homegrown brands. Shop now on VP Label:
Featured Image Credit: Everyday on Sales
