The Government would not have raised the GST rate if it had been avoidable, said Second Minister for Finance Chee Hong Tat, in response to repeated calls from various opposition parties to lower the GST rate. 

The rising cost of living has been a key area of debate this general election, with some opposition parties criticising the People's Action Party (PAP) for raising the GST rate amid global inflation.

In a Facebook video uploaded on Saturday (April 26), Chee defended the GST hike, saying that it was a "difficult choice" that was carefully considered.

"We studied all the options, and without it, we would not be able to fulfil our promise to take care of our seniors in an ageing society," said Chee.

Chee argued that the GST scheme is part of a progressive system in which "tourists, foreigners, and those who are better off who pay most of our GST revenue", echoing comments from National Development Minister Desmond Lee at a doorstop on Friday (April 25).

He said that lower-income households shoulder a "far lower effective GST rate" after receiving Government aid — such as the Assurance Package and enhanced permanent GST Vouchers — that effectively delay the impact of the GST hike for "more than 10 years".

Chee also reiterated PM Lawrence Wong's promise that there will be no further GST increases until 2030.

"We are now in a much better and stronger position to meet our structural challenges," added Chee, reiterating that the Government would not raise taxes unless absolutely necessary.

He concluded, saying: "We will continue to be a responsible Government that works with you and for you to improve your lives."

Chee is helming the four-member PAP team contesting in Bishan-Toa Payoh GRC against the Singapore People's Party at the upcoming general election on May 3.

GE2025: Opposition calls for GST rollback

The GST rate was raised from seven to eight per cent on Jan 1, 2023, and subsequently raised to nine per cent the following year.

These GST hikes has been previously heavily debated in Parliament, with Leader of the Opposition Pritam Singh raising concerns on Feb 28 that the increases may have led to "turbocharged inflation".

Opposition parties such as the Progress Singapore Party (PSP) and the Singapore Democratic Party (SDP) have, in recent rallies, called for a GST rollback and GST exemptions on basic necessities to aid Singaporeans with the rising cost of living. 

Speaking to media at Lakeside MRT station on Friday (April 25), PSP secretary-general Leong Mun Wai made a rebuttal to earlier claims from the PAP's Desmond Lee who rejected proposals for GST exemptions.

"In other countries where the market and economy are bigger, it is difficult to implement an exemption for these essential items, but in Singapore, we are a much smaller economy, and our whole system is more efficient," he said, against Lee's claims that a tax waiver wouldn't work in Singapore.

SDP's leader Chee Soon Juan also criticised the Government's practice of handing out cost-of-living voucher while simultaneously raising GST rates at a rally on Thursday (April 25), likening the situation to "an arsonist setting your house on fire and giving you a cup of water to put it out".

For our GE2025 microsite, visit here.

dana.leong@asiaone.com

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