GST hike should not be pushed back any further, Government prepared to do more if situation ‘worsens significantly’: DPM Wong

Singapore Deputy Prime Minister and Finance Minister Lawrence Wong speaking in Parliament on Jul 4, 2022.

SINGAPORE: Deputy Prime Minister Lawrence Wong has again stressed the need to go ahead with a planned goods and service tax (GST) hike, but said the Government is “prepared to do more” if the economic situation worsens significantly.

Responding to parliamentary questions on Monday (Jul 4) about whether the Government will consider further delaying the impending 2023 GST hike, Mr Wong said: “Crucially, we must always ensure that we have sufficient resources to tackle our longer-term challenges, and do so in a fiscally responsible and sustainable manner. 

“And this is why the Government will need to go ahead with the GST increase, as announced at Budget 2022.” 

The Government had already anticipated the higher inflation outlook this year, which is why the GST increase will be staggered in two steps.

The GST is set to rise from 7 per cent to 8 per cent in 2023, and to further increase to 9 per cent in 2024.

“We should not push back the GST increase any further, as we will need the funds urgently to take better care of our growing number of seniors and to meet our rising healthcare expenditures,” said Mr Wong, who is also the Minister for Finance.

The S$6.6 billion Assurance Package, announced at Budget 2022, has been set aside to “cushion all Singaporean households” from the impact of the GST increase, he added. 

Most Singaporean households will not feel the impact of the GST increase for at least five years, and the impact is delayed for lower-income households by about 10 years, he said. 

“Let me be clear. Taking into account the latest inflation, the latest higher prices, this assurance still holds today. This is because we had designed the package with a buffer precisely in case of higher inflation,” said Mr Wong. 

“We will continue to assess the adequacy of the Assurance Package as the inflationary outlook evolves. If need be, we will further enhance the Assurance Package to uphold our commitment.”

 This article was originally published on CNA, 4 July 2022. Its inclusion on this website is solely for education purposes. 

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