Home News Featured News S’pore to ‘start moving’ on planned GST hike amid economic recovery, add’l...

S’pore to ‘start moving’ on planned GST hike amid economic recovery, add’l revenues needed: PM Lee

Mr Lee said that the GST hike was seen as a need coming for some years.

- Advertisement -

Singapore – In his New Year’s message on Friday (Dec 31), Prime Minister Lee Hsiang Loong said that the government will have to start moving on the planned Goods and Services Tax (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.

- Advertisement 1-

Those better off should contribute a larger share, but everyone needs to shoulder at least a small part of the burden.

“Overall, our system will remain progressive and fair,” he added.

Mr Lee said that the GST hike was seen as a need coming for some years.

“Now that our economy is emerging from Covid-19, we have to start moving on this.”

The Budget 2022, unveiled by Finance Minister Lawrence Wong on Feb 18, 2022, will lay the basis for sound and sustainable government finances for the next stage of Singapore’s development.

The plan to raise the GST by two percentage points to 9 per cent from 7 per cent was announced in 2018 during then-Finance Minister Heng Swee Keat’s Budget speech.

Mr Heng highlighted the need to increase the tax to strengthen Singapore’s revenues amid recurrent increases in security, healthcare, and other social expenditures.

- Advertisement 2-

“The responsible way to pay for them is through taxation so that every generation pays its share,” said Mr Heng during his speech.

“We should not borrow for recurrent spending because that will put the burden of recurrent spending on future generations,” he explained.

The increase of two percentage points would result in revenue of almost 0.7 per cent of GDP per year, said Mr Heng.

Although initially scheduled to be implemented between 2021 to 2025, the government postponed the increase in 2021 due to the impact of the Covid-19 pandemic.

However, Mr Heng reiterated that the hike would come “sooner rather than later,” sometime between 2022 and 2025.

“Throughout this pandemic, we have stood together, supported difficult decisions, made many sacrifices, and come through safely,” said Mr Lee.

- Advertisement 3-

We can confidently say that we have measured up as one people, he noted.

“In a crisis, everyone saw the need to make tough choices and accepted hard policies for the common good,” said Mr Lee, encouraging the public to maintain the same unity of purpose to keep on progressing together./TISG

Read related: Jamus Lim uses parable of ‘saving and spending’ to explain why we should not have a GST hike

Jamus Lim uses parable of ‘saving and spending’ to explain why we should not have a GST hike

Follow us on Social Media

Send in your scoops to news@theindependent.sg 

- Advertisement -

Read More

Stories you might’ve missed, Jan 28

It’s not just OCBC and Singapore, scammers are ripping off people across Asia Photo: screengrab/ BDO Unibank Inc Singapore —  The phishing scams that burst into media headlines in Singapore last month  have also swept through other countries in Asia.  People in...

17 months jail for maid who shot and shared TIkTok video of herself bathing old man

Singapore – A domestic worker in Singapore was sentenced to 17 months' jail on Thursday (Jan 27) after she admitted recording and sharing online...

Family of otters no match for lone monitor lizards’ powerful tail whacking as they try to steal a fish

Singapore – A glimpse of nature at work was caught on camera as a family of otters tried to steal a fish from a...

Coffee & tea price increase at Geylang East Food Centre

Dear Editor, I refer to the attached picture taken from a stall at Geylang East Food Centre, 117 Aljunied Ave 2 when the 'GST hike'...

Single mum keen to earn side income, loses nearly $50,000 to ‘Gucci’ scammers

Singapore – News of the surge of phishing scams involving  OCBC Bank has made many other bank customers come forward with their own stories...

Stories you might’ve missed, Jan 28

It’s not just OCBC and Singapore, scammers are ripping off people across Asia Photo: screengrab/ BDO Unibank Inc Singapore —  The...

17 months jail for maid who shot and shared TIkTok video of herself bathing old man

Singapore – A domestic worker in Singapore was sentenced to 17 months' jail on Thursday (Jan 27) after she...

Family of otters no match for lone monitor lizards’ powerful tail whacking as they try to steal a fish

Singapore – A glimpse of nature at work was caught on camera as a family of otters tried to...

Coffee & tea price increase at Geylang East Food Centre

Dear Editor, I refer to the attached picture taken from a stall at Geylang East Food Centre, 117 Aljunied Ave...
Follow us on Social Media

Send in your scoops to news@theindependent.sg