How the impending GST hikes will affect everyday expenses
This comes after a GST hike was announced during Budget 2022.
Singapore’s Goods and Services tax (GST) will be increased in two steps over the next two years.
The GST will be raised to 8 per cent in January 2023, before being raised to 9 per cent in January 2024. The staggered increase is to allow Singaporeans time to get adjusted to the rising prices.
“Our revenue needs are pressing. But I also understand the concerns that Singaporeans have about the GST increase taking place at the same time as rising prices,” said Mr Wong.
However, GST will be absorbed by the Government on publicly subsidised healthcare and education, while Town Councils will get an additional $15 million a year to cover the GST payable on service and conservancy charges.
Youthopia takes a look at how daily spendings will be affected by the increase in GST in the next two years.
Currently, a meal at McDonald’s costs $6.53 on average under the current 7 per cent GST charge. In 2023, when GST is raised to 8 per cent, it will cost $6.59, and $6.65 in 2024 when it is raised to 9 per cent.
Similarly, an average t-shirt that costs $35 in Zara in 2022, will cost $35.33 in 2023 and $35.65 in 2024.
A family living in an average four-room HDB flat that currently pays $200 for their monthly utilities will pay $201.87 in 2023 and $203.74 in 2024.
Minister of Finance Mr Lawrence Wong stated that the GST hike was part of a need to increase government revenue as Singapore tackles a rise in demand for healthcare and tries to “decarbonise” by investing in low carbon and energy efficient resources.
A revamped GST voucher scheme and Assurance Package have also been put into place to reduce the pressure of the GST hike. This will cover about five years of additional GST expenses for most Singaporean households.