Government to top up Assurance Package with $1.4 billion to help Singaporean households offset upcoming GST hike
The total package now comes up to around $8 billion.
The Government will add $1.4 billion to the Assurance Package to help Singaporean households offset the upcoming GST hikes.
Speaking in Parliament on Monday (Nov 7), Deputy Prime Minister and Minister for Finance Lawrence Wong explained that details on the Package’s enhancement would be shared in Budget 2023.
The enhancement is set to offset expected increased household expenditure and GST expense in light of “higher inflation this year and in upcoming years”.
The GST hike, previously announced in Budget 2022, will see an increase in two stages: from seven to eight per cent from Jan 1, 2023, and from eight to nine per cent from Jan 1, 2024.
Mr Wong said that the majority of Singaporean households will not feel the impact of the GST increase; cash and other forms of support would amount to more than what “most citizens will pay in additional GST” for at least five years, and 10 years for lower-income households.
“So for those who ask the Government to delay the GST rate increase, the Assurance Package in effect does precisely that, for the majority of households,” said Mr Wong.
Mr Wong cited an example he used in this year’s Budget Statement, which centred on a family that would incur $800 in additional GST expenses. From a previous calculation, the family would receive $4,000 in benefits – five times their additional GST costs.
In light of “higher inflation this year and in upcoming years”, the package will correspondingly increase to help offset expected increased household expenditure and GST expenses.
The latest enhancement brings the total Assurance Package to around $8 billion. Of this amount, $6 billion was set aside in Budget 2020, and a $640 million enhancement was added earlier this year.
The bottom ten per cent of households, including many retiree households without income, do not pay any GST at all after the permanent offsets, he added.
Mr Wong further assured that the full impact of the GST will be borne largely by higher-income households, tourists and foreigners who are based here.
He stressed that the GST rate increase is an “important revenue move that will provide us (the Government) with additional resources to meet our growing healthcare expenditures and to take better care of our growing number of seniors.”