Financial Minister Heng Swee Keat announced during the 2018 budget to raise GST from 7% to 9% sometime between 2021 to 2025.
The 2018 budget was set to enhance a better financial infrastructure in the next decade.
The plan to raise GST by 2 percent will only be executed when the state of economy is right, how much expenditures grow and how buoyang existing taxes are.
Mr Heng expects it to be “earlier rather than later” in the period.
The hike in GST will be mainly used to support the recurrent healthcare, security and social spending so that every generation pays its share.
There will also be an enhancement of the GST voucher scheme to offset the increment.
Mr Heng also added that there will be higher tax imposed on the wealthier portion of the population, he mention that “it is only fair that they contribute more to the society,”.
The heavier taxing of the rich has already being going on over the previous years, it is safe to expect a smaller value increment imposed.
Property taxes were also included in the reform, as the rate goes from 3% to 4% for properties over S$1 million.
GST will also be introduced on the imported services, such as consultancy and marketing services from overseas providers.
He specifically mention “Spotify” as one of the affected service, so it is reasonably safe to assume that all other apps such as “Netflix” or “Amazon” will also be listed in it.
Tobacco tax would be increased by another 10%, exact timing unconfirmed.
Good news is that there will be a one time issuance of “AngBao” as mention by Mr Heng. Any Singaporean above 21 year of age will receive either $300, $200, or $100 on GST refund depending on income level. This project will cost the Government $700 million of the previous year’s budget surplus.
The budget presented today has shown the improvement in Singapore’s economy, but also outlines the needs of change for the better in certain areas.
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