(Singapore, Feb 18, 2020) The island country’s goods and services tax (GST) hike won’t kick in next year and all Singaporeans aged 21 and older this year will get a one-off cash payout of between $100 and $300, according to Singapore’s Budget 2020 which was announced this afternoon.
In his a little more than two-hour budget speech, Singapore’s Deputy Prime Minister and Finance Minister Heng Swee Keat said that the coronavirus outbreak is a “stark reminder of the continued importance of maintaining a sound fiscal footing to deal with surprises and unexpected scenarios”.
The planned GST hike from 7% to 9% was first announced in 2018.
He added that the GST would remain unchanged next year after reviewing revenue and expenditure projections and considering the state of the economy but “we will not be able to put off the increase indefinitely”.
Even though the GST increase is not being planned for next year, the government has appropriated $6 billion this year to help cushion the impact by the time when the increase does take effect in the future.
The Budget’s new Assurance Package means all adult Singaporeans will get cash payouts of between $700 and $1,600 over five years, so most households will get enough to offset at least five years’ worth of additional GST expenses.
Those living in one- to three-room flats will get enough to offset about 10 years’ worth.
This works out to about $7,000 in GST offsets over five years for a family of four in a four-room flat with a combined income of $6,000. It includes cash of about $4,000.
The Government said then that it was necessary, given the needs in healthcare and other areas, and would take place sometime between 2021 and 2025.
The cash payout scheme is part of a $1.6 billion Care and Support package to help families defray some of their household expenses amid the downturn.
