For ages, the notion of GST has terrified many.
And for good reason.
Living expenses are pricey enough to begin with, let alone living expenses with goods and services tax (GST).
Little wonder why our grandparents were always chiding the government under their breaths.
Impending GST Hike
So lest you’re unaware, GST is set to increase by two solid percentage points: from 7% to 9%.
Which wouldn’t have been half as bad had prices not been increasing everywhere. Groceries, utility bills, you name it they’ve increased it.
With that in mind, MP Liang Eng Hwa has voiced out for a delay, but Second Minister for Finance Indranee Rajah was firm when she spoke about it in Parliament today (11 January 2021).
It cannot be delayed forever.
Lest you’re unaware, the rise was first announced in 2018. It has already been shelved aside for four years, mainly due to COVID-19.
Minister: Impact of GST Hike Will Be Delayed for Most Households in S’pore
Though the government will have to implement a GST hike, they have assured that what they can do is delay the impact of the hike.
To Ms Indranee, the date of effect is different from the date that the public will feel the impact of the GST hike.
And to further delay this particular impact, the Assurance package, worth $6 billion, will come into play.
With this package, the majority of Singaporeans will not feel the impact for some five years.
Meanwhile, lower-income groups would not feel the impact for ten years.
Essentially, she said, the package would act as a buffer for increased expenditure (due to the GST hike).
For the record, Ms Indranee has added that the purpose of the GST hike is to help the nation with recurrent spending needs, particularly in the healthcare and social support sectors.
If this sounds confusing, then watch this video to the end and you’d understand:
Back in October 2021, Finance Minister Lawrence Wong announced that the GST hike will take place between 2022 and 2025.
He also added that there was no way to avoid it, as expenditures continue to rise due to healthcare factors.
It should also be noted that Singapore’s core inflation is expected to rise in the former half of 2022, before easing in the latter half.
Headline inflation would probably average around 1.5% to 2.5% in 2022. Last year, there was an expected 2.3%.
Meanwhile, the Government will continue to shield its citizens from inflationary pressures, and will continue to monitor low-income households and most middle-income households.
Several schemes, such as GST Voucher – U-Save rebates and the more recent Community Development Council Vouchers have helped shield Singaporeans in one way or another.
You can watch more about GST Vouchers here:
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Featured Image: YouTube (MCI Singapore)