Singapore – Minister of Finance Lawrence Wong is putting the finishing touches on the national Budget, taking lessons from past crises that have tested Singapore “severely.”
“This coming Tuesday marks 80 years since Singapore fell to the Japanese in World War II,” wrote Mr Wong in a Facebook post on Saturday (Feb 12).
“Even after WWII, we have continued to face many crises,” he said, using racial riots and SARS as examples.
“These crises tested us severely, in many different ways. But we also learnt valuable lessons, like the importance of unity and standing together to face our challenges.”
He added that those lessons “are never far from his mind.”
Mr Wong revealed he was putting the “finishing touches” to the Budget 2022 while taking into account lessons learnt from past crises.
“While we rebuild from the Covid-19 pandemic and put Singapore in a stronger position for the future, I know we can overcome any challenge by continuing to stand in unity and walking this journey together,” said Mr Wong.
The Budget 2022 will be announced on Friday (Feb 18), with reports noting that the Goods and Services Tax (GST), wealth, and carbon taxes would be possible tax priorities in the Budget.
After the two years of expenditures directed at containing the economic impact of Covid-19, experts say that Budget 2022 would focus on fiscal sustainability.
“The past two years of pandemic has taken a huge toll on Singapore’s fiscal resources, and there is now an urgent need to refocus on fiscal sustainability,” said DBS senior economist Irvin Seah in a Channel News Asia report.
Budget 2022 will be “one of the more tax-focused budgets in recent years,” noted KPMG Singapore’s tax partner See Wei Hwa.
“(People are watching) for any changes to the tax regime, especially given that the Government has tapped more than S$50 billion of the reserves over the last two years,” he added.
“Now that we are emerging from Covid-19, the question is how can the Government make sure that its fiscal condition will be sustainable over the longer period?”
In his New Year’s message on Dec 31, 2021, Prime Minister Lee Hsien Loong also said that the government will have to start moving on the planned GST hike given the need for a “vibrant economy to generate resources.”
The government must have reliable and adequate revenues to carry out its social programmes, said Mr Lee, noting the need to raise additional revenues to fund the expansion of the healthcare systems and support schemes for older Singaporeans.
“This is the rationale for raising a broad-based tax like the GST, coupled with a comprehensive scheme of offsets to cushion the impact on lower-income households,” said Mr Lee.
He explained that the GST forms an essential component of the country’s system of taxes and transfers, which also includes income and wealth taxes./TISG
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