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Upcoming GST hike is just part of wider inflation woes: businesses

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Chelsea Ong

Published Wed, Dec 21, 2022 · 02:00 PM
    • Businesses are unlikely to absorb the 1 percentage point rise in the goods and services tax, as they already face other cost pressures.
    • Businesses are unlikely to absorb the 1 percentage point rise in the goods and services tax, as they already face other cost pressures. PHOTO: BT FILE

    THE upcoming goods and services tax (GST) hike will have a limited stand-alone impact, as it is merely part of wider cost pressures that businesses have been facing, companies told The Business Times.

    This backdrop of rising costs also makes it likely that companies will pass the GST increase on. Yet even if prices are raised, some businesses may see increased demand as consumers switch to more affordable alternatives.

    On Jan 1, the GST is set to rise 1 percentage point to 8 per cent. But headline inflation for 2023 is already forecast at between 4.5 per cent and 5.5 per cent, before taking into account the GST hike.

    GSTRetailF&BSingapore inflation

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