“Expenditure in many areas will rise, especially in healthcare... To meet these needs, we must plan ahead and prepare early. We need to remain prudent in our spending, save up where possible, and raise
revenues, but in a fair and progressive way. This way, we can ensure a fiscally sustainable and secure future for ourselves and our children. “
- Finance Minister Heng Swee Keat, Budget Statement 2018
The Government announced that Singapore’s Goods and Services Tax (GST) would be raised from 7% to 9% sometime between 2022 to 2025. Before we move to raise the GST, we will carefully assess the prevailing economic conditions as well as our needs at that point.
Why do we need to raise GST?
Our population is ageing. In 2019, about 15% Singaporeans were aged 65 and above. By 2030, this will increase to 25%. We will need to spend more on healthcare to support our seniors. These are our grandparents and parents.
We need more national revenue to support higher spending. Raising GST is the prudent and sustainable way to achieve this.
Costs will go up. How will people manage?
- The needs are recurrent and therefore require a recurrent source of revenue.
- The increased expenditure will benefit all; it is therefore fair for all to contribute.
We will keep the cost of living manageable and affordable.
- The Government will continue to support Singaporeans through subsidies on education, health, housing, and other assistance.
- The permanent GST Voucher scheme will be enhanced when the GST is increased.
- Under the Assurance Package for GST announced at Budget 2020
, every adult Singaporean will receive a cash payout of $700 to $1,600 over five years
The majority of Singaporean households will receive offsets to cover at least five years’ worth of additional GST expenses incurred.
Lower-income households will receive much more. Those living in 1- to 3-room HDB flats will receive offsets equivalent to about 10 years’ worth of additional GST expenses incurred.
- The Government will continue to absorb GST on publicly funded education and healthcare.
Keen to find out more? Check out the resources below.