Southeast Asia Information Port (www.dnyxxg.com) – When the Singapore government decided to raise the Goods and Services Tax (GST) in 2022, there was no indication that corporate tax revenue would increase so significantly, as discussions on issues related to Base Erosion and Profit Shifting (BEPS) were still ongoing.
On February 26 (Thursday), Singapore's Prime Minister and Minister for Finance, Lawrence Wong, summarized the government's fiscal policy debate in Parliament, stating that the future of the BEPS mechanism was difficult to predict at the time, and that funding a permanent healthcare commitment with such an uncertain source of revenue would be irresponsible.
The Singapore government had previously estimated that in the second half of this decade, new spending in the healthcare sector alone would reach 0.6% to 1.2% of GDP, and that this significant increase in spending would be permanent.
After studying various options, the government determined that the GST was the only broadly applicable and sustainable financing method that could both fund the continuously growing healthcare demand and maintain the country's reserve framework.
Lawrence Wong emphasized that although the government has raised the Goods and Services Tax (GST), it has also introduced supporting measures to ease the burden on Singaporeans, postponing the effective GST rate increase for most Singaporean families by at least five years.
