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Singapore Budget 2018: GST to be hiked to 9% in "earlier" part of 2021-2025 period
THE government plans to raise the goods and services tax (GST) by two percentage points to 9 per cent from 7 per cent, sometime in the period from 2021 to 2025, Finance Minister Heng Swee Keat said on Monday.
"The exact timing will depend on the state of the economy, how much our expenditures grow, and how buoyant our existing taxes are," said Mr Heng.
"But I expect that we will need to do so earlier rather than later in the period."
The increase in revenue in the government coffers from the GST hike will translate to almost 0.7 per cent of GDP per year.
"This GST increase is necessary because even after exploring various options to manage our future expenditures through prudent spending, saving and borrowing for infrastructure, there is still a gap," said Mr Heng.
Singapore will continue to absorb GST on publicly subsidised education and healthcare. It will also enhance the permanent GST Voucher (GSTV) scheme when the GST is increased.
The government will make a S$2 billion top-up to the GSTV Fund to support these payments. Currently, the government disburses about S$800 million per year from the GSTV Fund.
The government will also implement an offset package for a period for help Singaporeans adjust to the GST hike. Lower and middle-income households will receive more support, said Mr Heng.
For more Budget 2018 stories visit bt.sg/budget18