SINGAPORE: The Goods and Services Tax will be increased to 7 percent, from 5 percent presently.
This was announced by Prime Minister Lee Hsien Loong in Parliament on Monday.
However, when the rise will be implemented, will be decided later.
Speaking in Malay, Mandarin and English, Mr Lee explained that the hike was necessary to finance the enhanced social safety nets needed to help the lower income group. He emphasised that the offset package would more than counter the rise in GST.
While Singapore’s current model to tackle the widening income gap is sound, Mr Lee said the government would take on two approaches to deal with the new environment – to strengthen the safety nets and tilt the balance in favour of the lower-income groups who do not benefit from the fruits of economic growth.
Source
Transport fares are increasing and now GST as well… when you think that 5% is high enough and the complaints about GST have died down, the government want to increase it some more. Everything is getting more expensive these days! The government says that what they get from the increase will go to help the lower income group, but is this the only way to go about doing it? It’s going to take time before any results of this GST increase (and aid provided to the lower income group) can be seen, and before then, I think there will be quite some commotion about this increase. How many people will accept the reason given by the government? Personally, I don’t think it will be a lot.
If GST increases and people also happen to be getting higher salaries overall, I don’t think people will complain much. But the thing is, while the prices of so many things are increasing, not everyone’s salary is increasing as well. In the end, more and more people are just going to feel the pinch.