JAKARTA • The planned increase in the goods and services Tax (GST) in Singapore reflects the balance between staying competitive and staying inclusive, and in particular, being able to afford the quality healthcare that an ageing population needs, said Deputy Prime Minister Tharman Shanmugaratnam.
"The Budget announcement of a future increase in GST from 7 to 9 per cent is a part of the balance that we are striking," Mr Tharman said at a forum in Jakarta yesterday.
He added: "That balance between staying competitive, ensuring that we can grow at a sustainable pace, but at the same time staying inclusive, and in particular, being able to afford the quality healthcare that an ageing population needs - that's foremost on our minds."
On Feb 19, Singapore's Finance Minister Heng Swee Keat announced in Budget 2018 that the GST will be raised for the first time in more than a decade, from 7 per cent to 9 per cent, and that the hike will be implemented some time from 2021 to 2025.
Mr Tharman said Singapore can do so in a way that is fair both to the poor and middle class, and those who are better-off will "one way or another have to pay more over time. But we want to do it in a way that doesn't hurt our competitiveness".
Mr Tharman was speaking at a panel discussion at a conference organised by Bank Indonesia and the International Monetary Fund (IMF).
Other panellists included IMF managing director Christine Lagarde, Indonesia's Finance Minister Sri Mulyani Indrawati and Australia's former deputy premier and federal treasurer Wayne Swan.
The event is part of the lead-up to October's IMF-World Bank Annual Meetings in Nusa Dua, Bali.
Ms Lagarde met Indonesian President Joko Widodo in Jakarta on Monday, and accompanied him on a community visit to a hospital.
She said that Indonesia's economy continues to prove resilient, with a sound performance and favourable outlook, and commended Mr Joko and his government on their successful economic management and strengthened policy frameworks.
"We look forward to holding the 2018 IMF-World Bank meetings here in October, and I would like to thank the authorities for their excellent cooperation," she added.
Correction note: This article has been edited for clarity.
