SINGAPORE – Singapore on Monday (Feb 19) announced it plans to raise its sale tax to 9 per cent from 7 per cent, but said the change will be only be made “sometime” between 2021 and 2015.

Finance Minister Heng Swee Keat told parliament of the plans to raise the Goods and Services Tax (GST), which has been at 7 per cent since 2007.

“The exact timing will depend on the state of the economy, how much our expenditures grow, and how buoyant our existing taxes are. But I expect that we will need to do so earlier rather than later in the period,” Heng said.

“This GST increase is necessary because even after exploring various options to manage our future expenditures through prudent spending, saving and borrowing for infrastructure, there is still a gap.”

A hike in GST was widely expected as Singapore has to increase social spending to meet the needs of its rapidly aging population.

Heng added that increasing the GST by two percentage points will provide the government revenue of almost 0.7 per cent of GDP per year.

Singapore introduced its GST in 1994, with a 3 per cent rate. This was raised to 4 per cent in 2003 and 5 per cent in 2004.

Singapore’s Finance Minister Heng Swee Keat concluded his Budget speech on Monday, Feb 19, with several key announcements that will impact ordinary Singaporeans. Here are the main highlights.

1. One-off SG bonus for adult Singaporeans

Singaporeans above the age of 21 will receive a one-off “SG Bonus” this year, ranging from $100 to $300, depending on their income.

The payout comes as the Government expects an overall budget surplus of $9.6 billion, or 2.1 per cent of GDP, for the 2017 financial year, said Mr Heng.

Read more here.

2. GST to be raised to 9%

The Government plans to raise goods and services tax (GST) from 7% to 9%, to be implemented sometime from 2021 to 2025.

The exact timing will depend on the state of the economy, how much expenditures grow, and how buoyant existing taxes are, said Mr Heng.

Read more here.

3. New e-tax for imported services

From Jan 1, 2020, consumers and businesses who buy imported services from suppliers based overseas which have no establishments in Singapore will have to pay goods and services tax (GST).

The new e-tax will be levied on two types of services: business-to-consumers (B2C), including video and music streaming services, apps and online subscription fees, as well as business-to-business (B2B), such as marketing services, accounting services and IT services.

It will not affect e-commerce for goods such as online shopping.

Read more here.

4. Increase of Foreign Domestic Worker levy and raising of the qualifying age for concession

The monthly levy for the first maid employed without a levy concession will be raised to $300 from the current $265, while the monthly levy for the second maid employed without a levy concession will also increase to $450, up by $185.

At the same time, the qualifying age for levy concession under the aged person scheme will be raised to 67 years, instead of 65.

These moves will be effective from April 1, 2019.

Read more here.

5. Bigger grants to buy resale flat with parents, singles to get grants to live near parents

The Proximity Housing Grant (PHG) has been enhanced with immediate effect. Singles will now get a grant of $10,000 if they buy a Housing Development Board (HDB) resale flat near their parents, and singles who buy a flat to live with their parents will now get $15,000.

Families who buy a flat to live with their parents or married children will now get $30,000 instead of $20,000.

In addition, HDB is also simplifying the criterion of what constitutes a flat that is “near” — from “within 2km” to “within 4km”.

Read more here.

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Sometimes Singaporeans take things for granted and once in a while, it takes the viewpoints of a foreigner to realise how good we have it here.

An American from Boston, Jon Paul Dante, posted a heartwarming message on Facebook on how in awe he is of Singapore.

Currently, a trumpet artist with the Singapore Symphony Orchestra, Jon said that he ended up living in Singapore “completely by accident” but is humbled by how lucky he is to be here.

On the first day of Chinese New Year (Feb 16), Jon took a photo of a group of Muslims having their Friday afternoon prayers near his apartment.

He marvelled at the “racial and religious masterclass” Singapore puts on and compared it to the situation that is happening in his own home country.

Here’s what he wrote in full:

“Malay Muslims at Friday prayer time just below apartments where joyous Chinese New Year celebrations are taking place throughout Singapore.

“Once again, I have conflicting emotions of humility and immense gratitude for where I am so lucky to be living in the world right now, versus a deep feeling of disgust and heartbreak for the country from which I am from.

“After all, America is supposed to be a country of immigrants; multiracial and multicultural where everyone is living in harmony.

“America is supposed to support freedom of religion.

“America is supposed to be the place where, with hard work, you can make your dreams come true.

“America is supposed to be the place where mutual respect and compassion for one another is fundamental.

“America is supposed to be where the government is supposed to be elected for the people by the people.

“America is where anyone from anywhere is supposed to feel safe.

“America is where I grew up being taught to love my brothers and sisters regardless of race, color or Creed.

“America was where I was taught to say ‘please’ & ‘thank you’

“America was a place where people held doors for one another, and young people were taught to respect their elders.

“Sadly, it doesn’t appear to be any of these things anymore.

“But yet, here I am in Singapore, exactly half a world away from America, experiencing all of these things on a daily basis. Everyday, Singapore is putting on a racial & religious integration masterclass for the whole world to see.

“Singapore. A country only 446 square miles (1/4 the size of Rhode Island) with nearly 6 million people of all ethnicities and religions living and working peacefully side by side. And with zero gun and drug crime due to zero tolerance enforcement policies and mandatory death penalties for first offenders.

“In Singapore, a place that I ended up living in nearly completely by accident, I am honestly living my dreams, both on and offstage.

“I believe I may be the luckiest man on earth.

“Thank you Singapore. ❤️”