According to state media TodayOnline, every percentage increase of the GST will translate to S$1.8 billion in tax revenue for the Singapore government. The state media consulted business lobbyists from PriceWaterCooper House (PWC) and Deloitte, and speculated that Prime Minister Lee Hsien Loong will raise GST by 2% to 9%.
“An increase in the GST could bump up the government’s tax revenue the most, compared to other types of tax. Each increase of 1 percentage point would net an additional S$1.5 billion to S$1.8 billion per year, experts estimate. For the latest financial year, the Inland Revenue Authority of Singapore collected S$11.1 billion in GST. Experts have said they expect the GST to be raised by 2 percentage points to 9 per cent — translating to additional tax revenue of between S$3 billion to S$3.6 billion a year.”
Business lobbyist Richard Mackender from Deloitte told the state media that the government should exempt GST for essential items like children’s clothes, prescription medicines for elderly and food like rice and vegetables. Currently only the purchase of gold and a list of business transactions is exempted from GST, the Singapore government is not interested in removing GST to alleviate the rising cost of living resulted from GST.
The business lobbyists support a GST increase because they want low corporate taxes and income taxes. The “tax leaders” said they wanted to help the poor with more CPF vouchers, and made no mention of the impact on the middle class.
In the coming Budget of 2018, tax increases are expected because the government claimed that spending is increasing. However, the S$53 million-a-year administration with Prime Minister Lee Hsien Loong drawing the world’s highest salaries at S$2.2 million-a-year, are unwilling to go for a pay cut.