GST should be raised to 12%?
On 6 August 2015, the Ministry of Finance took a rare step in refuting claims “the Government planning to raise the GST after the next General Elections”. Singapore government slammed online websites for spreading baseless claims that the GST would be raised from 7%. Personal finance website, Dollar And Sense, also rubbished the notion that GST would be raised to 10% on 22 September 2015.
Well, they could be wrong as PM Lee Hsien Loong recently dropped big hint that there could be impending tax hike due to increased government spending.
In my perspective, I feel that there could be a grave need for the GST to be raised to 12%. Yes, it is 12%. Why so? Am I crazy? After all, it had been 10 years since GST had been raised from 5% to 7%. That GST hike had been perceived to inflate the cost of living and many people feel that the tax is regressive because the poor would be affected the most.
Before dismissing this article, it is important to look at the big picture and understand the macroeconomic dynamics. In doing so, Singaporeans can then better understand the insights of our leaders before jumping to conclusions.
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