Singapore: 2 percentage point GST increase in 2018 Budget
According to sources, Credit Suisse is expecting a 2 percentage point GST hike to be revealed on Monday the 19th of February in this year’s Budget statement.
This is expected to be put into action from 2H2018 onwards.
The bank’s long-term fiscal scheme shows annual government expenditure rising by an additional 1.7% to 2.8% of GDP by 2025 driven by major infrastructure projects, measures to remodel the economy and higher social expenditure.
The fiscal position could rise to a deficit of 0.3-1.4% of GDP by 2025 from an approximated 1.4% surplus in FY2017, assuming no revenue changes.
The government could also consider other options such as a wealth tax which involves increasing annual property taxes or making property tax rates more progressive. Another option is a sugar tax as a health measure, which has already implemented by numerous countries in Asia. Moreover, another option could be expanding GST in order to include the purchasing of digital goods and services.