If there’s one thing every Singaporean hates it’s GST. Just the very word is like a slap in the face.
Okay, I’m exaggerating. Or maybe not.
Unfortunately, though, it’s my solemn duty to inform you that our GST Hike cannot be scrapped, and our Deputy Prime Minister Heng Swee Keat explains why.
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Why GST Hike Cannot Be Cancelled: ‘It’s About Responsibility’
Deputy Prime Minister Heng Swee Keat explains in his budget round-up speech on Friday, 28 February that the planned goods and services (GST) tax hike cannot be delayed or dropped entirely.
The reason is that the money is required to fund upcoming spending, especially in the area of healthcare due to Singapore’s increasingly demanding ageing population needs.
According to Mr Heng, the spending will eventually benefit all Singaporeans so it makes sense that everyone contributes towards the cost.
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A Shared Responsibility
Specifically, he says, “This is about all of us taking shared responsibility to pay for our needs and our society’s needs, and sharing in the effort to provide for them.”
Those who are worried about the less well off need not fret because the $6 billion Assurance Package and permanent GST voucher scheme will make sure that lower-income households will pay less than those who are well-off.
That said, GST is only one option to meet Singapore’s needs and the Government will adjust income and wealth taxes in order to raise revenue.
For those who are unaware, the GST hike will be put into place from 2022 to 2025.
Even Ministers For Finance Don’t Like Taxes
Mr Heng says that “Nobody likes taxes, not even ministers for finance. As a government, our approach is to tax lightly, so that people can keep most of what they earn, and so that they can decide how best to spend it for themselves and for their families.”
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He points out that some national needs such as healthcare facilities and services are better met by taxes.
“But there are many critical, national needs that are better met by government provision, through taxes. These include building up healthcare facilities and services, and providing subsidies to ensure that our healthcare needs are well taken care of.”
Here’s a quick summary of what he has discussed in his speech in case you TLDR:
- GST needs to be raised in order to support fellow Singaporeans, especially in terms of healthcare facilities and services.
- We all have a “collective responsibility” to look after one another. Mr Heng says, “Raising the GST, a broad-based tax to meet a broad-based need is a sustainable approach.”
- Mr Heng also assures that when the GST is raised, it will be fair for everyone, via the Assurance Package. This “will effectively delay the increase for almost all Singaporeans by at least five years; and over and above the transitional support, the permanent GST Voucher will further help the lower- and middle-income.”
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