Chart of the Day: Rate of Singapore GST hike over the years
The hike implementation originally scheduled in 2022 was moved to 2023.
This chart from OCBC Bank shows the rate of goods and services tax (GST) hikes over the next years.
Particularly, the GST rate hike, which was originally slated to take effect beginning 2022, was delayed to January 2023. Over the two years, the hike will be raised—8% for 2023 and 9% for 2024.
A similar trend was also shown in the previous raise from 2004 to 2007, wherein the GST was progressively raised by one percentage point starting 2003. By 2007, it reached the current rate of 7%.
“The raising of GST in a gradual fashion reduces the disruption posed to consumption and ensures a smooth transition to a higher consumption tax rate. That said, there may be a higher administrative burden for companies as they seek to adjust the higher GST rates in a staggered fashion,” commented Selena Ling, Head of Treasury Research & Strategy, OCBC Bank.
The gradual rise follows PM Lee Hisen Loong’s New Year message earlier this year when he mentioned the government’s need to move on the planned GST hike.