In a speech on Tuesday morning (June 21), Finance Minister Lawrence Wong announced that the planned increase in the Goods and Services Tax (GST) will proceed as planned.
The GST hike from 7 per cent to 9 per cent was supposed to have begun implementation last year but was deferred due to the economic fallout of the Covid-19 pandemic.
Earlier this year, Mr Wong said that the hike will take place in two stages, to 8 per cent on Jan 1, 2023, and 9 per cent on Jan 1, 2024.
Revenues from the increase are set to help fund social services, especially for the country’s ageing residents.
The Finance Minister had announced on Tuesday a new $1.5 billion support package that is targeted to help families cope with inflation.
One of the questions he was asked at the press conference was whether the GST hike would be delayed.
“Our spending needs are rising very sharply, especially because of an aging population and healthcare spending.
We have looked at all the different possibilities for raising revenue and we have made various revenue moves in the Budget, including on personal income tax, property tax and luxury car taxes, but they are still not enough and that’s why we have to raise the GST,” The Straits Times quotes him as saying.
However, in recognition of the economic uncertainties people are currently facing, he added that he chose to delay the GST hike as much as possible, as well as to do it in two steps instead of one.
Nevertheless, netizens, already feeling the rise in the cost of living, expressed dismay.
Other governments are helping people “to cushion the inflation by reducing taxes and tariffs,” wrote one.
“We are already feeling it now without the gst increase,” commented another.
“There is no need to increase GST,” argued a third.
Others pointed out that it’s those with the lowest incomes that will suffer more.
One suggested that the size of the government should be reduced.
Another wrote, “Cut minister pay by half will settle a lot of issue.”
One commenter wrote, “GST increase is akin to adding oil to fire.”
“GST should only be imposed on people buying branded stuff and not on essentials like water electricity or grocery for daily use,” suggested one netizen.
/TISG
Higher cost of living, GST hike, on residents’ minds at Sengkang Town Hall held by WP MPs