The exact timing for the increase will depend on the state of the economy, growth in expenditure and the buoyancy our existing taxes.
File photo of shoppers in Singapore. (Photo: Ernest Chua/TODAY)
SINGAPORE: The much-rumoured goods and services tax (GST) increase was confirmed by Finance Minister Heng Swee Keat during his Budget 2018 speech on Monday (Feb 19), and it will go up from 7 per cent currently to 9 per cent some time in the period between 2021 and 2025.
Mr Heng said the exact timing of when the GST increase will kick in depends on the “state of the economy, how much our expenditures grow and how buoyant our existing taxes are”. "But I expect that we will need to do so earlier rather than later in the period."
That said, the minister said the GST hike will be implemented in a “progressive manner”. This means the Government will continue to absorb GST on publicly subsidised education and healthcare, and enhance the permanent GST Voucher scheme when the hike kicks in. The enhanced GST Voucher scheme will provide more help to lower-income households and seniors, he added.
The Government will also implement an offset package for a period of time to help Singaporeans adjust to the GST increase, with lower- and middle-income households receiving more support, the minister said, with more details to come after the timing of the GST increase has been determined.
PLANNING AHEAD, RESPONSIBLY
The decision to increase GST was made to help fund expenditure in areas like healthcare, security and other social spending, Mr Heng explained, who added the increases in these areas will be recurrent, benefit Singaporeans broadly and directly benefit current generations.
Healthcare expenditure, for example, has been increasing over the years, with the Government spending S$3.9 billion in Financial Year (FY) 2011 and this figure jumping to S$10.2 billion in FY18, the minister highlighted.
In the next decade, an ageing population and increasing chronic diseases will mean building new healthcare capacity to meet rising demand and invest in new medical technologies to improve care quality – and these will lead to spending that will leapfrog expenditure on education within the next decade, he said.
Today, the average annual Government healthcare subsidies received by an elderly person is more than six times that of a younger person, or about S$4,500 more. Additionally, by 2030, the number of elderly will increase by about 450,000 to 900,000, the minister said.
More at https://www.channelnewsasia.com/news/singapore/budget-2018-gst-in-singapore-to-be-raised-to-9-between-2021-and-9970714
HAHAHAHAHA
"Raising the GST to 9 per cent will add about $3 billion to the coffers each year.
Every little bit will help."
A fiscally sound but politically risky Budget
By Chua Mui Hoong
This could have been a pure sugar Budget with its huge surplus and SG Bonus for all adult Singaporeans. Instead, Finance Minister Heng Swee Keat coated the sugar with a strong lacing of lemon.
The goods and services tax (GST) will be raised from 7 per cent to 9 per cent “sometime in the future from 2021 to 2025”. Some analysts had forecast a hike to 10 per cent over two years, so the impending hike is gentler and slower than expected. But it still carries quite a sting.
The delay in introducing the GST hike might be due to the unexpected injection of $4.9 billion from the Monetary Authority of Singapore’s (MAS) net profit, propelling the Budget into a healthy surplus of $9.6 billion when $1.91 billion was forecast.
The headline figures will cause many Singaporeans to ask: Why raise GST when Singapore’s Budget nearly always ends with a surplus?
The short answer is that long-term spending will go up, and more tax revenue sources need to be found.
The extra funds from MAS or the higher-than-expected revenue from stamp duties this year cannot be relied on always. A more permanent way to raise taxes has to be found – and the GST, currently at a relatively low 7 per cent, is a natural target.
Meanwhile, Singapore’s people and infrastructure are both ageing, and spending needs are rising. Healthcare spending will overtake education in the next decade. It has already more than doubled since FY2011, to $10.2 billion in FY2018.
Singapore aims to spend an extra $3.6 billion a year to raise healthcare spending from 2.2 per cent to 3 per cent of gross domestic product over the next decade. Where will that extra $3.6 billion or 0.8 percentage points of GDP come from? In part from the GST hike, expected to raise revenue by 0.7 per cent of GDP.
In fact, budgeting 3 per cent of GDP on healthcare is low by global standards. I think it is conservative, if Singaporeans want to pay less out of pocket and demand that a bigger share come from the state. Spending may go beyond 3 per cent of GDP – and that money has to be allocated for.
Already, Singapore is spending more than it collects in operating tax revenue each year. The books are balanced by adding half of investment income from past reserves, which raised about $14 billion in recent years. That is more than the contribution from either corporate or personal income taxes or the GST.
Raising the GST to 9 per cent will add about $3 billion to the coffers each year.
Every little bit will help.
More at http://www.straitstimes.com/singapore/a-fiscally-sound-but-politically-risky-budget
Hongbao amount so pathetic, but better something than nothing.
Heng ah heng ah, Ah Heng didn't suffer a stroke today when delivering the budget speech. :P
Budget 2018: Singaporeans to get 'hongbao' SG Bonus of up to S$300 following 2017 Budget surplus
https://www.channelnewsasia.com/news/topics/budget2018/budget-2018-singaporeans-to-get-hongbao-sg-bonus-of-up-to-s-300-9970790?cid=TWTcna
BUT REMEMBER:
Last fucking chance for the 70% to come to their senses and vote the monkeys in white out before they utterly and completely ruin our lives.