There is no contradiction between Prime Minister Lee Hsien Loong's comments on Sunday about an impending tax hike and what Deputy Prime Minister Tharman Shanmugaratnam had said in 2015 on the adequacy of revenue, the Ministry of Finance (MOF) said yesterday.
Its statement - in response to queries from The Straits Times - comes in the wake of online accusations that the Government is making a U-turn on raising taxes.
Mr Tharman, who was then Finance Minister, said in 2015 that the revenue measures the Government had already undertaken would provide sufficiently for increased spending planned until the end of the decade. MOF said: "This is in line with PM Lee's speech at the PAP convention on Nov 19, 2017, where the Prime Minister said, 'For this current term of government, we have enough revenue'."
The current term ends in 2021, unless a general election is called before that.
Mr Lee triggered public discussion when he said on Sunday that "raising taxes is not a matter of whether, but a matter of when".
Yesterday, MOF said that while any decision to raise taxes will not be taken lightly, "necessary investments in the future are needed".
"The Government has to remain forward-looking, planning beyond this decade, and will study all options carefully, doing it with least impact on the less well-off and on Singapore's economy," it said. "Planning for the issue now will allow us to better ease in the needed measures, and to give our people and businesses some time to adjust."
Mr Lee said tax hikes are needed due to rising infrastructure investments and social spending.
Social expenditure, in areas such as healthcare and education, has almost tripled to $34 billion over the past decade.
Investments in infrastructure are also expected to grow to about $30 billion by the decade's end.
Since Mr Lee's remarks on Sunday, economists and tax experts have suggested that the goods and services tax (GST) is the tax most likely to be raised, with many expecting an announcement as soon as Budget 2018.
GST was introduced in 1994 at 3 per cent. It was raised to 4 per cent in 2003, to 5 per cent in 2004, then finally to 7 per cent - the current level - in 2007.