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Singapore Budget 2018: No 'test balloons' on GST tax hike, says Swee Keat

GST tax hike needed beyond current government term office to provide for increased expenditure

Mr Heng cited four occasions when the need for tax increase was publicly mentioned before this year's Budget.


FINANCE Minister Heng Swee Keat has asked whether Workers' Party chairman Sylvia Lim is ready to apologise and withdraw her allegation that the government had floated "test balloons" about the need to raise the Goods and Services Tax (GST).

Refuting Ms Lim's allegation in a statement issued on Friday, Mr Heng maintained that the government has consistently indicated "it has enough money for its current term office, but beyond that, it needed to provide for increased expenditure, especially on healthcare, with increased taxes".

This was stated in a Ministry of Finance's letter that ran on The Straits Times' Forum Page on Feb 28.

Mr Heng cited four occasions when the need for tax increase was publicly mentioned before this year's Budget statement.

Prime Minister Lee Hsien Loong first brought up the issue in his 2013 National Day Rally speech.

He spoke about the likelihood of a tax increase again last November.

Mr Heng had reiterated the need for tax increase in his 2017 Budget statement and flagged this again at a constituency function a few months later.

He said in his statement: "Taking all these statements together, two things are clear: One, that there is no need to raise taxes for the current term.

"But two, there is a need to raise taxes for the future. There were no test balloons."

He also noted that the government is announcing the forthcoming GST increase early - precisely in line with a demand raised by Worker's Party leader Low Thia Kiang, who had, during last year's Committee of Supply debate, demanded that Mr Heng "be upfront with Singaporeans" if indeed an increase in GST is being considered before the end of this decade, so that the people "are not blindsided … as they were with the sudden 30 per cent increase in water price".

Granted that Ms Lim has had the opportunity to check the record, Mr Heng asked whether she should withdraw her allegation and apologise to the House of Parliament.

During his Budget 2018 speech on Feb 19, he had announced that the GST would be raised from the current 7 per cent to 9 per cent some time between 2021 and 2025.

The exact timing depends "on the state of economy, how much our expenditures grow and how buoyant our existing taxes are", he explained.


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