The goods and services tax (GST) rate went up from 8 per cent to 9 per cent at the start of 2024 – completing the second stage of the rate hike that was first announced in 2018.
The Government has stuck to its guns about raising the GST, although it previously held off the hike that was planned for 2021 as Singapore grappled with the ongoing pandemic, the uncertain economy and inflation.
The GST hike comes after a series of price increases to utilities, among others, in the past few months.
DPM Wong said in his maiden Budget speech in 2022 that the revenue will go towards supporting healthcare expenditure and taking care of senior citizens, as other areas of social spending rise as well.
Why it matters
The GST hike, which comes amid other price increases, has been a political hot potato for the ruling party. Cost-of-living pressures received a lengthy airing in Parliament last November.
All eyes are now on Budget 2024 to see what support measures the Government has in store, after DPM Wong said on Jan 3 that the Ministry of Finance is studying ways to provide additional support for Singaporeans.