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SINGAPORE – While the goods and services tax (GST) rate will remain at 7 per cent next year, the rate increase cannot be deferred indefinitely as the revenues are needed to support Singapore’s spending needs to secure its long-term future, said Deputy Prime Minister Heng Swee Keat on Thursday (Oct 15).
“We will continue to study the timing of increasing the GST rate carefully, taking into account the pace of our economic recovery, our revenue outlook and how much spending we can defer to later years without jeopardising our long-term needs,” he told Parliament in a speech to round up the debate on the Government’s Covid-19 strategy.
Mr Heng noted that GST collections this year are projected to be down by 14 per cent from initial estimates before the start of the year, mainly due to travel disruptions and the impact of the circuit breaker period.
Collection of GST is also expected to stay lower than usual for a few more years, until international travel recovers fully, he added.
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