Singapore GST hike 'sometime' between 2021 and 2025

Marco Green
February 21, 2018

The exact timing of the GST increase will depend on Singapore's economy, expenditure growth and existing taxes, Heng said in his Budget 2018 speech in Parliament.

According to a graphic by Straits Times, before the hike, as at January 2018, Singapore remains among the bottom five countries with its 7% GST rate, while Malaysia is at the bottom third on the list among selected Asia-Pacific countries.

The GST will go up from the present 7% to 9% while the hike is expected to yield government revenue of almost 0.7% of GDP per year, he said.

Singapore introduced a GST in 1994, at 3%.

Despite Heng declaring a surplus of SGD9.6 billion (RM28.4bil) for the 2017 financial year, he warned it was one-off and not structural.

Heng said the new carbon tax would encourage businesses to take measures to reduce emissions, making them more competitive as tighter limits are imposed by more countries when worldwide deals come into force.

Currently, about $800 million is disbursed every year.

Heng said Singapore would begin to impose GST on e-services provided by overseas suppliers starting 2020, even if the suppliers had no physical presence in the republic.

This only applies to businesses which provide exempt supplies and includes the provision of financial services, the sale and lease of residential properties and the import and local supply of investment precious metals.

All Singapore citizens aged 21 and above will get a one-off "SG Bonus" of up to S$300 each as the 2017 budget came in with a surplus of nearly S$10 billion (US $7.6 billion), the city-state's finance minister announced on Monday. The plan is to increase it to between S$10 and S$15 per tonne by 2030.

The ministry, however, stressed that when it comes to households, the impact of the carbon tax will be "small", making up about 1 per cent of total electricity and gas expenses on average.

From 2019, funds will be set aside to help companies be more energy efficient, Mr Heng said.

With the rise in major terrorism threats, Singapore also has to spend more in security.

As petrol, diesel and compressed natural gas (CNG) already have excise duties, these will not be affected by the carbon tax. Those who produce greater reduction in emissions will receive more support, he said.

Other reports by Click Lancashire

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