During the Budget round-up speech on Friday (Feb 28), Deputy Prime Minister Heng Swee Keat explained why the planned goods and services (GST) tax hike cannot be completely done away with.
Adding that the government took on an approach to “tax lightly, so that people can keep most of what they earn”, he said that ultimately the taxes help “meet national needs that are better met by government provision”.
Mr Heng explained that a “big shift in public expenditure in the next decade will be in healthcare spending”, adding that he expected public healthcare spending to grow by around one percentage point of GDP over the 15 years from 2015 to 2030.
Taking the issue head-on, Mr Heng said, “Yet even among those who agree in principle on the need to raise taxes, some have asked: “Why GST?””
He said that a broad-based tax like the GST is an “appropriate and responsible way to pay for major societal needs”.
“Such spending benefits all Singaporeans, and so it is fair for everyone to bear some part of the costs. This is about all of us taking shared responsibility to pay for our needs and our society’s needs, and sharing in the effort to provide for them”, he said.
The last time the GST was raised was in 2007.
Mr Heng also added, “we ensure that we are fair when the GST is raised. Through the Assurance Package, we will effectively delay the increase for almost all Singaporeans by at least five years; and over and above the transitional support, the permanent GST Voucher will further help the lower- and middle-income”. /TISG
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