No need for further GST increases up to 2030, Latest Singapore News - The New Paper

No need for further GST increases up to 2030

There will be no need for further increases in goods and services tax up to 2030, said Deputy Prime Minister Lawrence Wong on Feb 28.

Wrapping up the debate on his Budget statement in Parliament, he said: “As of now up to 2030, we are in a sound position.”

He was responding to a question by Progress Singapore Party Non-Constituency MP Hazel Poa, who asked if there would be a need to raise GST from now until 2030.

To this, DPM Wong said the 2 percentage point GST hike - from 7 per cent to 8 per cent on Jan 1 last year, and to 9 per cent on Jan 1, 2024 - is meant to close the gap between revenue and expenditure until 2030.

“We have closed the funding gap up to 2030. The GST increase that we announced was intended for this, so we are okay up to 2030. We do not need further GST increases up to 2030,” he said.

The Government has said the revenue from the increase in GST will go towards meeting Singapore’s medium-term needs, such as in healthcare and social spending.

In an occasional paper on medium-term fiscal projections published in February 2023, the Ministry of Finance projected that government spending would rise to about 19 per cent to 20 per cent of gross domestic product (GDP) in the 2026 to 2030 financial years, and may exceed 20 per cent of GDP by FY 2030.

To close this funding gap, moves were made at both Budget 2022 and Budget 2023 to strengthen the Government’s revenue position so rising expenditure can be balanced by total revenue in the coming years, DPM Wong has said previously.

In Parliament on Feb 28, he said MOF will continue to update its projections of Singapore’s medium-term fiscal needs on a rolling basis.

He added: “So post-2030, we’ll have to see what the picture is. And beyond that, we’ll have to see if indeed there is a funding gap, if there are increased expenditures, and whether or not additional revenues or tax changes are needed to close those funding gaps.”

GSTSINGAPORE PARLIAMENTLawrence WongBUDGET 2024Committee of Supply 2024