All options to be studied before any tax hike: Heng Swee Keat
In its last term, the Government made property tax rates progressive and increased duties for betting, liquor and tobacco over time.
Earlier, the Goods and Services Tax was also raised and the Net Investment Returns framework was introduced and later revised.
These were some of the measures taken, with expenditures exceeding revenues since FY2015, said Finance Minister Heng Swee Keat yesterday.
In his closing speech to wrap up the Budget 2017 debate, he told Parliament: "These measures now serve us well to meet our spending needs through to the end of this decade. But beyond this decade we can expect the fiscal situation to become more challenging as expenditures exceed revenues in the longer term."
Rising expenditure is coupled with slower revenue growth as our economy matures, Mr Heng added.
To encourage prudent spending, the Government will apply a permanent 2 per cent downward adjustment on the budget caps of ministries and organs of state from this financial year.
"Besides spending prudently and effectively, we have to grow revenues, through new taxes, or raising tax rates over time. This challenge of raising revenues for growing needs is not unique to Singapore," he said.
But he said any decision to raise taxes will not be taken lightly, and all options will be studied carefully.
"We are in a good position today because we have planned early and invested in the long term.
"This... is a key strategic advantage so we must ensure that we continue to have this capacity to invest in critical programmes and infrastructure with long-term benefits in a way that is equitable to both current and future generations," he said.
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