No need for further GST increases up to 2030: DPM Wong

GST hike closed country’s funding gap until then; Govt to assess situation beyond that

- Tham Yuen-C

There will be no need for further increases in goods and services tax (GST) up to 2030, Deputy Prime Minister and Finance Minister Lawrence Wong said on Feb 28.

Wrapping up the debate on his Budget statement in Parliament, he said: "As of now up to 2030, we are in a sound position." He was responding to a question by Progress Singapore Party NonConstituency MP Hazel Poa, who asked if there would be a need to raise GST from now until 2030.

To this, DPM Wong said the 2 percentage point GST hike - from 7 per cent to 8 per cent on Jan 1, 2023, and to 9 per cent on Jan 1, 2024 - is meant to close the gap between revenue and expenditure until 2030.

"We have closed the funding gap up to 2030. The GST increase that we announced was intended for this, so we are okay up to 2030. We do not need further GST increases up to 2030," he said.

The Government has said the revenue from the increase in GST will go towards meeting Singapore's medium-term needs, such as in healthcare and social spending.

In an occasional paper on medium-term fiscal projections published in February 2023, the Ministry of Finance (MOF) projected that government spending would rise to about 19 per cent to 20 per cent of gross domestic product in the 2026 to 2030 financial years, and may exceed 20 per cent of GDP by FY2030.

To close this funding gap, moves were made at both Budget 2022 and Budget 2023 to strengthen the Government's revenue position so that rising expenditure can be balanced by total revenue in the coming years, DPM Wong said previously.

In Parliament on Feb 28, he said MOF will continue to update its projections of Singapore's mediumterm fiscal needs on a rolling basis.

He added: "So, post-2030, we will have to see what the picture is.