SINGAPORE – Singapore will be raising its taxes as government spending on investments and social services grows, said Prime Minister Lee Hsien Loong on Sunday (Nov 19).
“(Finance Minister) Heng Swee Keat is right when he said that raising taxes is not a matter of whether, but when,” said Lee at the People’s Action Party (PAP) annual convention.
Lee was referring to Heng’s remarks during his Budget speech earlier this year, where the minister outlined how spending on healthcare and infrastructure will rise rapidly and spoke of the need for new taxes or higher tax rates.
He told some 2,000 party members that “well before that time comes, we have to plan ahead, explain to Singaporeans what the money is needed for, and how the money we earn and we spend will benefit everyone, young and old”.
Just as older generations saved and invested, this generation must “plant trees in order that our sons and daughters, and their sons and daughters, will be able to enjoy the shade”, he added.
Economists said a rise in Goods and Services Tax (GST) could be in the works. It was last raised in 2007 by two percentage points to 7 per cent.
Singapore had introduced their GST in 1994 – 21 years before Malaysia introduced its own in 2015.
Two years ago in 2015, Singapore had also raised the petrol tax – RON95 rose by 15 cents (46 sen) per litre to 56 cents (RM1.72) per litre. Unlike Singapore, Malaysia does not tax petrol.
The rise in petrol duties was meant to encourage less car usage and reduce carbon emissions. Petrol duty rates have remained unchanged since 2003. But there were some good news for drivers: a one-year road tax rebate of 20 per cent for cars, 60 per cent for motorcycles and 100 per cent for the small number of commercial vehicles using petrol.