Gov’t to push through with GST increase despite rising inflation
The GST will be increased from 7% to 8% on 1 January 2023, and to 9% on 1 January 2024.
Deputy Prime Minister Lawrence Wong said the government cannot delay the implementation “any further” despite the rising prices of goods.
In response to questions from The Parliament, Wong said the government needs to go ahead with the increase to address other longer-term challenges being faced by Singapore.
“I hope everyone understands that the challenges before us are not just about coping with higher prices. We must also adjust to major structural changes in our operating environment, including the threat of climate change as well as greater geopolitical contestation between the major powers,” he said.
“We will need the funds urgently to take better care of our growing number of seniors, and to meet our rising healthcare expenditures,” he added.
Wong also underscored that the government had already taken into consideration higher outlook inflation for 2022 when it deferred the GST hike implementation to 2023. The GST will be increased from 7% to 8% on 1 January 2023, and to 9% on 1 January 2024.
Businesses and households need not worry about the GST hike, according to Wong, adding that the government has already set aside the $6.6 billion Assurance Package to cushion the impact of the increase.
“As I had shared in the Budget, the majority of Singaporean households will not feel the impact of the GST increase for at least five years. For lower-income households, the impact of the GST increase is delayed by about 10 years,” he said.
“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. 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,” he added.