Singapore raises GST for first time in 15 years, taxes ultra-wealthy more to support elderly, tackle climate change

Delivering 2022 budget, Finance Minister Lawrence Wong announces 2 percentage point GST raise alongside increases to personal income, property and vehicle tax

Prime Minister Lee Hsien Loong’s government foreshadowed plans to raise the GST in 2018, but the plan has been put off until now due to the Covid-19 pandemic

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A customer browses goods inside a supermarket in Singapore. Photo: Bloomberg

Published: 5:40pm, 18 Feb 2022Updated: 2:28pm, 21 Feb 2022

Singapore will roll out its long-delayed 2 percentage point increase in sales tax starting next year, Finance Minister Lawrence Wong said on Friday.

Unveiling the 2022 budget in parliament, Wong said the goods and services tax (GST) hike would take place in two steps – with an increase from the current 7 per cent to 8 per cent on 1 January 2023, and subsequently to 9 per cent on 1 January 2024.

Alongside this rate hike, Wong also announced plans to increase personal income, property and vehicle taxes – measures aimed at the ultra-wealthy. This will eventually add S$600 million ($447 million) a year to state coffers.

The country’s current S$5 per tonne carbon tax will also rise fivefold in 2024, and subsequently be increased until it reaches up to S$80 per tonne by 2030.

Despite continued Covid-19 economic woes, these moves were critical to shore up revenue to fund the health care and social needs of the country’s ageing population and to deal with climate change, Wong said.

“Revenue from the increase in GST will go towards supporting our health care expenditure and taking care of our seniors,” Wong said.

“No one likes to talk about taxes, but there are no painless solutions. Ultimately, every need must be paid by someone, every dollar not paid by one person will have to be made up by someone else, either today or in the future.”