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90% of Economists Polled Warn Singaporeans to Brace Themselves for GST Hike

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Ahead of the Budget on Monday (19 Feb), 9 in 10 economists say the Singapore government is set to raise the Goods and Service Tax.

This, according to a poll by Reuters.

The government has repeated in recent weeks the need to raise revenue to cope with an aging population, and has also indicated it might levy a tax on online purchases.

The GST rate has remained at 7 percent since 2007, and economists say it’s likely to be raised to 9 percent.

Singapore introduced GST in 1994, with a 3 percent rate.

This was raised to 4 percent in 2003 and 5 percent in 2004, then to 7 percent in 2007.

Some economists say that it’s likely GST will be raised from this year due to economic growth of an estimated 3.5 percent in 2017.

A 2 percentage point rise in GST could boost Singapore’s headline inflation rate by 1.0-1.5 percentage points and consequently, core inflation.

The GST hike by 2 percentage points would add around 0.6 percent of GDP to net government revenues annually.

 

 

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