Regarding the impact of an increase in the GST on Singaporeans and the possibility of delaying it, Ms. Indranee said the government has designed things in such a way that regardless of when the increase is will enter into force, its impact will not be felt until several years after its implementation.
“With the insurance package, for the majority of Singaporeans, we will effectively delay the impact for them by five years,” she said. “And for those on low incomes, the impact on them will effectively be delayed by 10 years.”
The S $ 6 billion insurance package, first announced in Budget 2020, will offer cash payments of between S $ 700 and S $ 1,600 over five years to all adult Singaporeans. This will help offset at least five years of additional GST expenses.
Those who live in one- to three-room apartments will receive enough to offset about 10 years of additional GST expenses.
“Essentially, whatever increase in expenses resulting from the GST, the insurance package is designed to cushion them against that increase. The government supplements them directly so that they do not feel the impact, ”added Ms. Indranee.
“The effective date and the date the impact is felt are two separate things,” she added. “We will continue to monitor low income households and the majority of middle income households.”