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THE COST of living in Singapore will become more expensive as the government plans to increase goods and services tax starting in 2024. The Singapore government said the increase in goods and services tax (GST) was imposed on various things, from food to other accessories.
Increase this tax to 9% and take effect as of Monday (1/01/24). Meanwhile, this increase is the second stage of increase. In 2023, sales tax will also increase to 8% from the previous 7%. This sales tax has previously not changed for 15 years.
This decision to increase occurred amidst the increasing cost of living. Therefore, opposition lawmakers called for the increase to be postponed. Singapore’s core inflation has slowed to 3.2% in November 2023, from a peak of 5.5% in January-February 2023.
However, inflation remains high with the central bank predicting an average of 2.5%-3.5% in 2024. Efforts by the government are needed to strengthen the country’s finances, as it faces a surge in Singapore’s aging population and rising healthcare costs. Meanwhile, it is estimated that a quarter of the world’s population will be aged 65 years and over by 2030.
“Delaying the GST increase will only pile up problems for the future, leaving us with fewer resources to take care of growing fiscal needs,” Deputy Prime Minister Lawrence Wong wrote in a parliamentary response, as quoted by Reuters, Friday (12/29), 2023.
The government has also provided fiscal assistance to households in a guarantee package worth more than S$10 billion, or around IDR117 trillion, including S$200 to S$800 paid to all adult Singaporeans this month.
Some traders have also pledged not to pass on tax increases for now to customers of home furnishings brand IKEA, saying it would absorb the 1% increase but not saying when it would end the policy. Supermarket chain FairPrice Group will absorb this increase on 500 basic necessities such as rice and vegetables. [sources/photo special]
