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SINGAPORE – The goods and services tax (GST) hike will not kick in next year while $6 billion has been set aside this year to help cushion the impact when the increase does take effect.
The Budget’s new Assurance Package means all adult Singaporeans will get cash payouts of between $700 to $1,600 over five years so most households will get enough to offset at least five years’ worth of additional GST expenses.
Those living in one to three-room flats will get enough to offset about 10 years’ worth.
This works out to about $7,000 in GST offsets over five years for a family of four in a four-room flat with a combined income of $6,000. It includes cash of about $4,000.
The planned GST hike from 7 per cent to 9 per cent was first announced in 2018.
The government said then that it was necessary given the needs in healthcare and other areas, and would take place sometime between 2021 and 2025.
Finance Minister Heng Swee Keat said on Tuesday (Feb 18) that the coronavirus outbreak is a “stark reminder of the continued importance of maintaining a sound fiscal footing to deal with surprises and unexpected scenarios”.
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