Finance Minister Lawrence Wong announced today (February 18) that GST will go up from 7 per cent to 8 per cent on 1 January 2023, and 9 per cent on 1 January 2024.
He went on to detail the various measures the Government will take to help Singaporeans, especially the less well-off, cope with the change.
He also stressed that GST will continue to be absorbed for publicly subsidised healthcare and education.
He 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 measure though 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, so most households will get enough to offset at least five years’ worth of additional GST expenses.
Mr Wong says he is providing an additional top-up of S$640 million to the Assurance Package.
The new $6.6 billion package will now provide these payouts:
- Cash payout: S$700 to S$1,600 for every Singaporean aged 21 and above over the next five years
- U-Save rebates: S$330 to S$570 additional U-Save rebates for eligible households over the next four years
- GST voucher (Seniors’ Bonus): S$600 to S$900 cash payout for eligible seniors aged 55 and above over the next three years
- MediSave top-ups: S$450 top-up over the next three years for Singaporean children aged 20 and below and seniors aged 55 and above
- CDC vouchers: S$400 vouchers (S$200 each in 2023 and 2024) for all Singaporean households
In addition to the Assurance Package, the Government will top up the CCC ComCare Fund by S$5 million over five years. It will also provide S$12 million over four years to self-help groups.
Another S$40 million will be set aside under the Productivity Solutions Grant to help businesses adjust — they can apply for subsidised accounting and point-of-sale solutions.
Enhanced GST voucher scheme
While the Assurance Package is meant to help Singaporeans with the transition, the Government will also be providing more permanent support by enhancing the GST Voucher scheme.
The GST Voucher scheme is being enhanced in three ways:
1. Service and conservancy charges rebate will be made a permanent component of the scheme.
2. The assessable income threshold for GST vouchers will increase from S$28,000 to S$34,000 to cover more Singaporeans.
3. Higher cash payouts: Those residing in homes with annual values of below S$13,000 will see cash payouts increase from S$300 to S$500 by 2023. Those residing in homes with annual values between S$13,000 and S$21,000 will see payouts increase from S$150 to S$250.
Mr Wong says the enhanced GST Voucher scheme will fully offset the total GST that retiree households living in one- to four-room HDB flats have to pay every year.
For low-income households without elderly members, the scheme will offset about half the total GST expenses.
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Featured Image Credit: Bernama