SINGAPORE — The hike in the goods and services tax (GST) will be implemented as planned, said Deputy Prime Minister and Finance Minister Lawrence Wong on Tuesday (21 June), amid Singapore’s rising spending needs.
Wong was responding to a question at a media conference on whether there will be a delay in the GST hike given rising prices, according to a report by the Straits Times.
While Wong said he understands the concerns of Singaporeans about the GST revision against the backdrop of rising inflation, he added that the two-percentage point hike is necessary.
"Our spending needs are rising very sharply, especially because of an ageing population and healthcare spending,” Wong said, according to the report.
"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."
His comments came after members of the public were invited last week to submit feedback on the proposed changes to the GST Act by 4 July, including the two-stage hike in the GST from seven per cent currently to eight per cent in 2023 and nine per cent in 2024.
On 18 February, Wong announced the two-stage GST hike during his 2022 Budget speech, saying that the GST revenue will help finance Singapore's healthcare expenditure and elderly care. Acknowledging Singaporeans’ concerns about rising prices, Wong also unveiled a slew of support measures including raising the Assurance Package to $6.6 billion comprising cash payouts, MediSave top-ups and others.
Wong noted that the Ukraine war had put “tremendous stresses on global supply chains” and that protectionist measures by countries had “compounded supply chain disruptions”.
“Global energy and food prices have risen sharply and we must expect global inflation to broaden to other areas and even to pick up further before it stabilises and gets better,” he added.
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