After the unveiling of all the goodies of the budget such as the Merdeka Generation Package and the $1.1b Bicentennial Bonus, (which includes up to $300 in GST voucher-cash that will benefit 1.4m people), Finance Minister Heng Swee Keat announced that the Government will raise GST by 2 percentage points sometime between 2021 and 2025.
He added that despite the planned increase, the Government will ensure that the overall system of taxes and transfers remains fair and progressive.
Heng also said that the Government will continue to absorb GST on publicly subsidised education and healthcare.
It will provide more help to lower-income households and the elderly by enhancing the permanent GST Voucher scheme, he said.
He also noted that the GST is not high by international standards even after the planned increase to 9 per cent.
The OECD average is 19 per cent and among Asia-Pacific countries, many have standard GST rates that exceed 9 per cent, he added.
The expansionary budget and competitive tax regime ultimately helps Singapore attract and retain investments and talent, which in turn help to bring in good jobs for Singaporeans, said Heng.
He added that a competitive tax regime is the anchor to Singapore’s economic growth, and the best way to sustainably increase tax revenues.
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