SINGAPORE - Between 2023 and 2024, Singapore's goods and services tax (GST) will go up from 7 per cent to 9 per cent.
But two programmes have been put in place to cushion the blow for ordinary Singaporeans. The first is a $6.6 billion Assurance Package, announced by then Finance Minister Heng Swee Keat in 2020 and topped up by Finance Minister Lawrence Wong on Friday (Feb 18).
The second is the introduction of a beefed-up permanent GST Voucher scheme, which will support lower to middle income households even after payouts from the Assurance Package end.
These are the key changes under both packages.
1. Adult Singaporeans to get total cash payouts of $700 to $1,600
About 2.8 million Singaporeans aged 21 and above will get cash payouts over five years under the Assurance Package. The first payment will be made in December, with the exact amount dependent on a person's income and property ownership status.
Eligible seniors will also get an additional $600 to $900 in GST Vouchers over the next three years.
2. GST Voucher U-Save utilities rebates of $330 to $570
As part of the Assurance Package, around 950,000 Singaporean households will get extra GST Voucher U-Save utilities rebates for the next four years.
These rebates apply to people living in Housing Board flats, and will be credited from January next year along with the regular GST Voucher U-Save rebate.
3. Higher GST Voucher cash payouts, more to qualify
When payouts from the Assurance Package end in 2026, the beefed-up GST Voucher scheme will continue to offset expenses for lower to middle income and most retiree households.
GST cash voucher payouts under the scheme will go up to either $250 or $500, with the exact amount depending on the value of one's home. The current payout is either $150 or $300, and is distributed to Singaporeans with annual income of $28,000 and below.
The assessable income threshold for GST Vouchers will also go up from $28,000 to $34,000, meaning that more Singaporeans will qualify for the scheme. About 1.5 million adult Singaporeans will receive this enhanced payout.
4. Service and conservancy charges (S&CC) rebate to become permanent part of GST Voucher scheme
Some 950,000 Singaporean households will get rebates to offset between 1.5 and 3.5 months of S&CC charges.
The rebates apply to Singaporean households living in HDB flats, and will be paid out in four tranches starting in April.
5. Assurance Package to offset at least five years of additional GST expenses for most Singaporean households.
Mr Wong reiterated his predecessor's promise that the $6.6 billion Assurance Package will offset at least five years of additional GST expenses for most Singaporean households.
For lower-income households, the offsets will amount to around 10 years of such expenses, while seniors will get even more support, he said.
For instance, an elderly couple living in a three-room HDB flat can receive about $6,800 over five years, or more than 30 times the additional GST they are likely to incur each year.
Clarification note: An earlier version of this article stated that the permanent GST Voucher scheme will support lower-income households. It has been updated to clarify that the scheme will support lower to middle income households.