|
5.26 This is why PM announced last year that we will raise the GST rate. Doing this will broaden our tax base, and enable the Government to implement Workfare and other initiatives to strengthen our social cohesion and grow our economy.
5.27 I have decided to raise the GST rate to 7% with effect from 1st July 2007. It is prudent to implement the GST increase now, in one step, while the economy is strong. This is expected to raise additional revenues of $750 million this year, and $1.5 billion per year going forward.
5.28 I have carefully considered the alternative of spreading out the increase in the GST over two years, and decided against it. It is better to raise prices at one go and compensate Singaporeans with a substantial offset package. By doing it in one step, it also means that no one can profiteer by raising prices in anticipation of a second step. For businesses, it also saves costs because they will not need to adjust their systems twice.
5.29 We will make it easier for smaller businesses to register for GST. SPRING will subsidise up to 50% of GST registration-related costs for Internet connection and IT consultancy and training for small enterprises. This support will be in place for two years starting from March 2007. SPRING and IRAS will also work with the industry chambers and associations to provide free automation software to businesses and help them administer the GST.
|
