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Sunday, June 26, 2022
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LAWRENCE WONG – 2% INCREASE IN GST WILL GO AHEAD AS PLANNED

Deputy Prime Minister Lawrence Wong said on 21 June that the 2% GST increase will go ahead as planned due to an increase in Singapore’s spending needs, in part largely due to rising costs in healthcare and an ageing population.

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Wong highlighted that the increase was debated heavily during the Budget and he noted that the government has already made alternative measures such as income tax, property tax and luxury car taxes.

However, GST still has to be raised because those are still not enough.

Additionally, Wong said that Singapore is not only facing inflation and cost of living, but also climate change, an ageing population and an increasingly divided world.

He said that for Singapore to be in a strong position fiscally, we must press ahead with the economic reforms to address the problems.

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Wong also said that the GST increase was pushed back as late as possible, and also staggered the GST increase in two steps.

Under the budget, a package to offset the impact of the GST increase was also put in place, with most Singaporean households not feeling the impact of the GST increase for at least 5 years.

Low-income groups will also not feel the impact of the GST increase for a decade.

The GST hike, from 7% to 9%, was originally meant to take place between 2021 to 2025, and was first announced by Heng Swee Keat back in 2018.

Heng announced in 2020 that the hike would not take place in 2021, after taking into consideration the projections of revenue and expenditure, as well as the economy.

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Heng then provided more details in Budget 2021, saying that the GST hike was likely to be implemented sometime from 2022 to 2025, and that it will happen sooner rather than later.

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