SINGAPORE: A planned increase in the Goods and Services Tax (GST) will help Singapore generate the revenue it needs to invest in its people and infrastructure, Finance Minister Lawrence Wong said on Wednesday (Feb 9).
Mr Wong made the comments in a video on his Facebook page a week before the 2022 budget statement was released on February 18.
He said Singapore was at a “critical turning point” as it continued to deal with the COVID-19 pandemic, adding that the government was “working hard to build a better Singapore for tomorrow”.
“To do this, we will need to invest more in our people and social infrastructure. The increase in GST will help generate the revenue we need for this purpose,” Mr Wong said.
He added that the extra income will be used to support Singapore’s growing healthcare needs and enable it to better care for the elderly.
In 2018, the then Finance Minister Heng Swee Keat first announced plans to increase the GST by two percentage points, from 7% to 9%.
Mr Heng said at the time that the increase would take place sometime between 2021 and 2025, depending on factors such as economic conditions.
It was delayed last year due to the impact of COVID-19 on the economy. However, Prime Minister Lee Hsien Loong said in his New Year’s message that the government will have to “get into action” with a planned 2022 budget rate hike as the economy emerges from COVID-19.
In a video on Wednesday, Mr Wong said transitional measures would be taken to cushion the impact of the GST hike.
“For example, a couple with two children earning US$5,000 a month would receive about S$6,500 in benefits under the protection plan,” he added.
The government will also permanently strengthen the GST Voucher scheme to better support low-income families.
“I know many of you are concerned about the cost of living, which is why we will have a package of measures to mitigate the impact of GST on low- and middle-income households and retirees,” said Mr Wong.
He added that he would share more details in the budget statement, which will be tabled in Parliament on February 18 at 3:30pm.
The budget statement will be broadcast live on Channel 5, CNA, CNA938, Capital 958, CNA website, CNA YouTube, CNA Facebook, 8 World News, 8 World News YouTube, 8 World News Facebook and MediaCorp’s meWATCH.
The Treasury’s Facebook page, Instagram and Twitter accounts will also be updated in real time with key announcements from the speech.
