Supporting Singaporeans – Why do we need GST?
“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 2021 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.
· 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.
Costs will go up. How will people manage?
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.
· Lower- to middle-income groups and seniors will get a GST Offset package.
· The Government will continue to absorb GST on publicly funded education and healthcare.
Keen to find out more? Check out the resources below.