Yahoo Finance 
GST hike not an option we have taken lightly: Heng Swee Keat
He added that they are only being honest and upfront by announcing the increase early.
The planned 2% hike on goods and services tax (GST) is not an option that government taken lightly, said Finance Minister Heng Swee Keat at the debate round-up for budget 2018 on 1 March.
Heng earlier revealed the government’s plan to raise GST to 9% sometime between 2021 to 2025 to address recurring spending growth on healthcare, security, and other social projects.
“This GST increase is necessary because even after exploring various options to manage our future expenditures through prudent spending, saving and borrowing for infrastructure, there is still a gap,” Heng said at the 2018 budget announcement in February. “Increasing GST by two percentage points will provide us with revenue of almost 0.7% of GDP per year.”
Heng furthered the government is only being honest and upfront about the country’s needs by announcing the GST hike early. “We are giving ample notice to citizens and businesses that we will need to raise GST.”
Meanwhile, RHB Research noted that delaying the implementation of GST hike will spur private consumption. “We believe this is the right move, as any rise in private consumption would be offset by a declining labour force, an as-yet-uneven economic growth, and higher interest rates in the near term,” said RHB analyst Shekhar Jaiswal.
More From Singapore Business Review
