Govt to announce support package to mitigate effects of impending GST hike at next Budget: DPM Heng

The Government will reveal a Goods and Services Tax (GST) support package at the next Budget, said Deputy Prime Minister Heng Swee Keat on Sun (Nov 10).

Speaking at the PAP65 Awards and Convention at the Singapore Expo, which he dubbed as most likely being “the last party gathering before the next General Election”, Heng said that the support package aims to mitigate the possible negative effects of the impending tax hike, which will see the GST be raised from 7 per cent to 9 per cent.

“At next year’s Budget, I will provide more details of the GST support package. This will cushion the impact of the increase, for all Singaporean households,” he said, adding: “More will be given to those with less, because this is fair.”

Heng also stressed that the support package is not intended to be an “election goodie”, and said that it will only be given when the hike takes place next term.

While he recognises that “some unhappiness will remain” regarding the GST hike despite the introduction of the package, Heng nonetheless urged fellow party members to “help explain” to the public the reasoning behind the GST increase.

“Like generations before us, we are taking a bit of pain for the good of our children, and generations to come,” Heng said.

Previously, Heng mentioned that the GST hike will be implemented some time between 2021 and 2025.

Announcement of support package to allegedly prevent opposition parties from trying to “stir” the issue: Prime Minister Lee Hsien Loong

Prime Minister Lee Hsien Loong endorsed the early announcement of the support package, claiming that it will prevent opposition parties from allegedly trying to “stir” up the issue.

“You can be sure that they will try,” he said.

Citing former Workers’ Party chief Low Thia Khiang’s question during last year’s Budget debate regarding the PAP’s mention of the GST hike despite not implementing the measure yet, Lee said: “Few governments in the world tell you before an election that they plan to raise taxes”.

He added that his government had done “the right and responsible thing” by giving advance notice regarding the GST hike instead of simply passing the matter to his successor and the next team.

Claims regarding GST hike have “no basis”, “inconsistent” with Govt stance: MOF in 2015

Government fact-checking website Factually published a statement by the Ministry of Finance in Aug 2015, which stated that there is “no basis” to claims on “some online websites” stating that the Government will raise the GST after the next General Elections “to fund increased spending planned in the next term of government”.

Such claims, according to MOF, are “inconsistent” with what the Government has stated before.

“In the 2015 Budget Statement in February, DPM Tharman Shanmugaratnam stated that the revenue measures the Government had already undertaken will provide sufficiently for the increased spending planned for the rest of this decade.

“Budget 2015 introduced important revenue measures such as the inclusion of Temasek in the Government’s Net Investment Returns (NIR) framework from 2016 onward, and the increase in the top marginal rates for personal income tax from Year of Assessment 2017.

“These measures came after moves in recent years to make Singapore’s property tax rates more progressive, with significantly increased tax rates for high value residential properties, offsetting reduced tax rates for lower value homes,” according to MOF.

“We have prepared ourselves in advance and that must remain the way in which we plan for our budgets in the decades to come,” said Tharman in his rounding up of the 2015 Budget Debate.

“With the change to incorporate Temasek in the NIR framework and the other tax changes I have introduced, in particular the increase in the personal income tax rate, we will be in a good position for at least the rest of this decade,” he added.

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