Singapore does not need further GST increases up to 2030 as 'we're in a sound position': DPM Wong

There will be no further increases in the Goods and Services Tax (GST) up to year 2030, said Deputy Prime Minister Lawrence Wong in Parliament today (Feb 28) as he wrapped up the debate on his Budget statement. 

He was responding to a query by Progress Singapore Party (PSP) Non-Constituency MP Hazel Poa, who asked if there would be a need to raise GST further between now and 2030.

She had raised the question in relation to the recent increases in GST to eight per cent in 2023 and subsequently nine per cent in 2024.

"We have closed the funding gap up to 2030. The GST increase that we announced was intended for this, so we are okay up to 2030. We do not need further GST increases up to 2030," he replied. 

The revenue from this GST increase will go towards medium-term needs, such as healthcare and social development.

However, DPM Wong also caveated that "post-2030, we'll have to see what the picture is, and beyond that we'll have to see… whether or not additional revenues or tax changes are needed to close funding gaps."

He added: "As of now, up to 2030, we are in a sound position."

GST increase not key cause behind inflation spike: DPM Wong

In Parliament, Wong also replied to a question by Workers' Party MP Jamus Lim, stating that the increase in GST is not the key reason behind the spike Singapore's inflation.

"We have seen the impact on monthly inflation when GST went up, but if you look at subsequent trends… inflation continues to moderate as it has in other advanced economies," he said.

"The impact of GST is not the key driver behind our inflation spike… and neither will it cause our inflation to remain high."

According to Wong, inflation is a global trend resulting from Covid-19 and pandemic-related restrictions, as well as the Russia-Ukraine war bringing a further surge in prices.

He added: "This inflation trend that's happening globally, we are seeing similar trends in Singapore, and our inflation rates are also coming down."

Wong had also shared earlier in his speech that core inflation for the fall of 2023 would have been 6.6 per cent instead of 4.2 per cent had the Monetary Authority of Singapore not acted in time.

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khooyihang@asiaone.com