While speaking at the Building our Future of Singapore Together dialogue at the Singapore Management University School of Law on Saturday (15 June), Deputy Prime Minister Heng Swee Keat said that the Goods and Service Tax (GST) would have been increased to at least 15 per cent if it weren’t for Singapore’s healthy reserves built up over the years.
Earlier this year, Mr Heng who is also the Finance Minister, announced in Budget 2019 that the GST will be raised from 7 per cent to 9 per cent as the Government’s spending on healthcare, infrastructure and security has increased and is expected to get higher in years to come.
The Minister stated that the hike will happen sometime between 2021 and 2025 which means it will be increased after the next General Election.
During the Q&A session that was held at Saturday’s event, a member of the audience asked Mr Heng if the Government has broader efforts to improve taxes in order to make it more progressive.
As a reply to this, the Minister said that the Net Investment Returns Contribution is the country’s biggest source of revenue, and not GST, personal income tax or corporate income tax.
In fact, he noted that due the money carefully kept aside by the country’s early generation of pioneers and leaders when Singapore was doing very well, it now managed to provide more income compared to other source.
“Which means that if we didn’t have that, the GST will not just be raised from 7 per cent to 9 per cent, but to 15 per cent, and there still would not be enough. So we will have to guard this very carefully,” he explained.
Although Mr Heng said that Singaporeans may have to pay 15 per cent GST if not for the healthy reserves built up over the years, netizens were not impressed at all.
Commenting on TODAY’s Facebook page, many of them felt that the 9 per cent increase is not a piece of good news that will make them feel better as there’s still an increase and they will have to struggle due to it. Others even sarcastically questioned the Deputy Prime Minister if they should be thankful to him as the GST is only raised to 9 per cent.
On the other hand, some online users urged the Government to “stop building the reserves” the way they do and think of a way of using it, especially when the citizens are suffering. They urged the Government to reduce the GST and use the reserve to help ease the cost of living in the country. Apart from that, Richard Tanbk said that “there are ways to increase our revenue in the treasury and not simply keep increasing GST”.
A bunch of online users are also pushing for politicians to take a salary cut, as they will then not have an increase in GST. They also questioned why Singaporeans are paying the price for the investment losses made by the Government, which resulted in a hike in GST.