GST increase will help Singapore generate the revenue needed to invest in people, social infrastructure: Lawrence Wong
SINGAPORE: The planned increase in Goods and Services Tax (GST) will help Singapore generate the revenue it needs to invest in its people and social infrastructure, said Finance Minister Lawrence Wong on Wednesday (Feb 9).
Mr Wong made the comments in a video on his Facebook page about a week before the Budget 2022 statement is delivered on Feb 18.
Singapore is at a "critical turning point" as it continues to deal with the COVID-19 pandemic, he said, adding that the Government is "working hard to build a better Singapore for tomorrow".
"To do so, we will need to invest more in our people and our social infrastructure. The GST increase will help generate the revenues we need for this purpose," said Mr Wong.
The additional revenue will go towards supporting Singapore's growing healthcare needs and enable it to better take care of senior citizens, he added.
The plan to raise the GST by two percentage points, from 7 per cent to 9 per cent, was first announced in 2018 during then-Finance Minister Heng Swee Keat’s Budget speech.
Mr Heng said then that the increase would take place sometime from 2021 to 2025, with the exact timing to be decided based on factors such as the state of the economy.
It was held off last year due to the impact of COVID-19 on the economy. However, Prime Minister Lee Hsien Loong indicated in his New Year message that the Government would have to “start moving” on the planned hike in Budget 2022 as the economy emerges from COVID-19.
In his video on Wednesday, Mr Wong said that there will be transitional measures to cushion the impact of the GST increase.
"Take the example of a couple earning $5,000 a month with two children – they will receive around S$6,500 in benefits under the Assurance Package," he added.
The Government will also permanently enhance the GST Voucher scheme to better support lower-income families.
"I know many of you are concerned about the cost of living and this is why we will have a comprehensive set of measures in place to cushion the impact of GST on lower-income and middle-income households, as well as retirees," said Mr Wong.
He added that he will share more details in the Budget statement, which will be delivered in Parliament on Feb 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 on MediaCorp’s meWATCH.
There will also be real-time updates of key announcements from the speech on the Ministry of Finance's Facebook page, Instagram and Twitter account, as well as on CNA's website, Telegram, Facebook and Twitter accounts.