S$1.4b top-up to GST Assurance Package in Budget 2023, taking it to S$8b

ANOTHER S$1.4 billion will be added to the Goods and Services Tax (GST) Assurance Package in Budget 2023, to help households cope with higher expenditure due to rising inflation, Deputy Prime Minister and Finance Minister Lawrence Wong announced in Parliament on Monday (Nov 7).

This will take the total amount under the Assurance Package – which aims to cushion the impact of the impending GST hike – to around S$8 billion, said Wong. The GST rate will rise from 7 per cent to 8 per cent on Jan 1, 2023, with a further hike to 9 per cent on Jan 1, 2024.

Given that higher costs are expected to persist in the coming years, household expenditure – and therefore the additional GST expenses – are expected to go up as well, said the minister. “The size of the Assurance Package will therefore need to be correspondingly increased to meet our committed levels of offset.”

“This ensures that the package continues to offset additional GST expenses for the majority of Singaporean households for at least five years, with around 10 years offset for lower income households,” said Wong.

First introduced with S$6 billion set aside in Budget 2020, the Assurance Package later received a S$640 million top-up in Budget 2022. More details on the latest enhancement will be provided in the Budget 2023 statement.

Singapore’s core inflation reached 5.3 per cent in September, with headline inflation at 7.5 per cent. For 2023, the official forecast ranges for headline and core inflation are 5.5-6.5 per cent and 3.5-4.5 per cent respectively – or 4.5-5.5 per cent and 2.5-3.5 per cent respectively, if “transitory effects” of the GST hike are excluded.