The bulk of the GST burden is borne by tourists and foreigners living in Singapore, as well as the top 20% of resident households, Senior Minister of State for Finance, Mr Chee Hong Tat said in Parliament.
Around $5.7 billion were collected in NET GST annually in 2018 and 2019.
This is after netting off refunds under the Tourist Refund Scheme ($200 million a year) and after netting off GST Vouchers of over $1 billion provided annually to Singaporean households.
Of the net $5.7 billion GST collected, tourists and foreigners living in Singapore accounted for 50% of it. The top 20% of resident households account for close to 20%.
This means 30% of the net GST collected is spread over 80% of resident households.
The bulk of the GST, as stated earlier, is borne by tourists, foreigners living in Singapore and the top 20% of households here.
GST increase
The Government will help all Singaporeans adjust to the GST increase, especially the less well-off.
Delay GST hike? Your wish is granted!
The $6 billion Assurance Package is now $8 billion, taking into account the elevated inflation situation.
For those who ask the Government to delay the GST rate increase, the Assurance Package in effect does precisely that, for the majority of households.
With the enhancement to the original package, the Assurance Package will delay the GST hike for the majority of Singaporean households by at least five years. And for lower-income households, the Assurance Package will delay the GST hike for them by around 10 years.
GST is permanent. The GST Voucher Scheme is also permanent.
Multi-tiered GST System
It is one that is tiered by income levels, with lower-income households paying a much lower effective GST rate than higher-income households.
Even after the hike, the effective GST rate for the bottom 30% of households remains unchanged at below 3%. This means that the GST increase will not negatively impact them.
The full impact of the GST will be borne largely by higher-income households, as well as tourists, and foreigners who are based here – and this is also the group that contributes the biggest share to net GST revenues from households and individuals.
