All talk about a GST hike is now confirmed after Parliament passed a Goods and Services Tax (Amendment) Bill yesterday.
The goods and services tax (GST) will increase in two stages – the first will see it go up from 7% to 8% and will take effect from Jan. 1, 2023 and then from 8% to 9% on Jan. 1, 2024.
Finance minister Lawrence Wong also announced that the government will spend S$1.4 billion to offset GST expenses to help most Singaporean households.
However, opposition MPs recorded their dissent at the passing of this bill.
Wong clapped back and said in Parliament that the opposition painted a “false and simplistic narrative” and was disappointed that they “took a different path” even after debating the issue during Budget 2022.
Even then, the opposition MPs disagreed with the decision to hike up the GST. They believe that there are other revenue options available.
Workers’ Party MP Jamus Lim said that raising the GST in uncertain times and when there is inflation is an “irresponsible” move that should be postponed.
Lim, who is also an economist and associate professor, brought up an observation where increase in inflation follows the announcement of the increase of taxes like GST. He cited the example of Japan where the inflation rate would double up after increasing its version of GST.
He suggested a solution where essential goods and services be temporarily exempt from the GST hike.
“Since these categories have been subject to the greatest price volatility in recent months, and given the enormous pocket share that such items command in the average household, it is reasonable to offer temporary, targeted relief for these essentially non-discretionary aspects of their spending,” he explained.
While the people in charge of the country continue to debate and argue in Parliament, some organisations have already reacted to the decision – amusing some people on the internet.
Nice one, NTUC and it’s game on for the other supermarkets out there.
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