During the reading of the Emerging Stronger Together Budget, Deputy Prime Minister (DPM) Heng Swee Keat announced that despite an initially-planned increase in the goods and services tax, the GST rate increase would not take effect in 2021.
DPM Heng first announced during the Budget 2018 that the goods and services tax rate would need to be raised some time between 2021 to 2025.
He also announced during the Unity Budget in February 2020 that in view of economic conditions then, the GST rate increase would not take effect in 2021.
On Tuesday (Feb 16), DPM Heng noted that this remains the Government’s plan.
However, he continued that it will not be able to put off the increase for too long and will have to make the move some time during 2022 to 2025, and sooner rather than later, subject to the economic outlook.
He said that to help cushion the impact when the GST rate is raised, the Government has set aside S$6 billion for an Assurance Package, which will effectively delay the effect of the GST rate increase for most Singaporean households by at least five years.
For lower-income Singaporeans, DPM Heng added that the offset will be even higher, with those living in one- to three-room HDB flats receiving about 10 years’ worth of additional GST expenses incurred. /TISG