SINGAPORE: The Government’s Budget statement for Financial Year (FY) 2018 was unveiled by Finance Minister Heng Swee Keat in Parliament on Monday (Feb 19).
Chief amongst the announcements was the raising of Goods and Services Tax (GST) from 7 to 9 per cent “sometime in the period” from 2021 to 2025, cushioned by news of a one-off “hongbao” or red packet for Singaporeans.
“This GST increase is necessary because even after exploring various options to manage our future expenditures through prudent spending, saving and borrowing for infrastructure, there is still a gap,” Mr Heng explained.
“Increasing GST by two percentage points will provide us with revenue of almost 0.7 per cent of GDP per year. This boost … will be vital in closing this gap.”
Mr Heng said the Government will continue to absorb GST on publicly-subsidised education and healthcare, while topping up the permanent GST Voucher Fund to help seniors and the lower-income bracket, and also implementing an offset package to help Singaporeans adjust to the increase.
Another highlight of Budget 2018 was an “SG Bonus”, where part of the expected FY2017 budget surplus of S$9.6 billion will be “shared” with Singaporeans aged 21 years and above in 2018. They will receive S$100 to S$300, depending on their income, in a payout costing the Government S$700 million.