PUTRAJAYA - In implementing a future GST hike, Singapore's Government will have to work very hard to not just win over voters, but also ensure those who will be affected significantly get the help they need, Prime Minister Lee Hsien Loong has said.
"We have given a lot of notice. There is time to explain, and there is time to work out how exactly we will make sure that Singaporeans are given the right support in order to be able to live with a new tax," he said.
"It is something which we are taking very seriously indeed," he added.
PM Lee was speaking to Singapore reporters after separate meetings with Malaysia's Prime Minister Mahathir Mohamad as well as Pakatan Harapan (PH) presidential council member Anwar Ibrahim and his wife Deputy Prime Minister Wan Azizah Wan Ismail, on Saturday (May 19).
In one of its first decisions, Malaysia's new government will slash its Goods and Services Tax - which was introduced in 2015 - from 6 per cent to zero per cent from June 1, in keeping with a campaign promise by the Pakatan Harapan coalition. It has however said it will reintroduce the sales and service tax and is taking other major steps, such as stamping out wasteful projects, to plug the shortfall.
PM Lee was asked by Singapore reporters whether this development would make it harder for the Singapore Government to sell the GST hike to Singaporeans. Singapore had, in February, announced plans to raise the GST from 7 per cent to 9 per cent some time between 2021 and 2025.
PM Lee had, in his speech in Parliament on Wednesday (May 16), cited how Malaysia's experience with the GST highlighted trust as a crucial factor in determining whether citizens will accept or reject an unpopular policy.
On Saturday, he said: "Raising a tax is never an easy thing to do... Each case is different, the circumstances in every country is different but every time you want to raise a tax, it is never a light matter. It is never an easy decision to make.
"You have to work very hard to make sure you have a very good case to be able to explain to voters why you are doing this, what you are using the money for and to persuade them that you know what you are doing and they can trust you. Then you must implement it well to make sure that it goes in smoothly. That the burden is carried fairly," he said.
"That people who are needy, who are low income, there is help given to them, because they are the ones who will be most hurt by new impositions. You have to make sure it is all properly done."
Added PM Lee: "It does not mean you cannot do it, but you have to be able to focus on it and to execute it properly. I think that is what we will have to do."