This year's budget has shown a slight shift from the PAP's previous policy stance and it has some elements of a more western-style welfare state.
While the benefits announced are still far from comprehensive, they have taken a step toward providing more support for those who have been left behind with the current system.
Now, some analysts are suggesting that if this continues, Singaporeans may soon have to pay higher GST to fund the extra government spending.
So far this year, no such suggestion was made by Finance Minister Tharman who explained that the government has sufficient surpluses to cover the social spending planned for this financial year.
Singapore's GST currently stands at 7% but some tax analysts have suggested that after next year, this could be raised to 9% or 10% as this is the average in other Asia-Pacific countries and the government is making moves to increase social spending.
Other taxes which might be raised include stamp duties property taxes and other consumption taxes.
When observers of the budget had termed it a "Robin Hood" budget citing the higher taxes on the rich and the greater benefits for the poor, Tharman rebutted the notion saying that while there were some of such measures, most policies were for the collective interest of society where they would benefit all.
Because of Tharman's comments, it has been speculated that more broad-based taxes are expected in future if high spending is continued.
This year's budget is expected to run a $6.7 Billion deficit after considering the almost $6 billion set aside for future spending. Last year's budget also ran a deficit although it was smaller than expected at only $0.1 Billion.
If the government continues to increase social spending, it will need to generate more revenues. Since GST is also a very large revenue source contributing the 2nd largest amount of tax revenue in 2014, small increases in GST can have large impact on government revenues.
As the government is afraid of scaring away international investors, GST is also attractive as it only affects the domestic population. However, such an increase would undoubtedly be unpopular with voters.
Would you support a rise in GST if it meant the government could do more to help the poor?
http://therealsingapore.com/content/analysts-singapore-may-see-gst-increase-10-next-few-years
While the benefits announced are still far from comprehensive, they have taken a step toward providing more support for those who have been left behind with the current system.
Now, some analysts are suggesting that if this continues, Singaporeans may soon have to pay higher GST to fund the extra government spending.
So far this year, no such suggestion was made by Finance Minister Tharman who explained that the government has sufficient surpluses to cover the social spending planned for this financial year.
Singapore's GST currently stands at 7% but some tax analysts have suggested that after next year, this could be raised to 9% or 10% as this is the average in other Asia-Pacific countries and the government is making moves to increase social spending.
Other taxes which might be raised include stamp duties property taxes and other consumption taxes.
When observers of the budget had termed it a "Robin Hood" budget citing the higher taxes on the rich and the greater benefits for the poor, Tharman rebutted the notion saying that while there were some of such measures, most policies were for the collective interest of society where they would benefit all.
Because of Tharman's comments, it has been speculated that more broad-based taxes are expected in future if high spending is continued.
This year's budget is expected to run a $6.7 Billion deficit after considering the almost $6 billion set aside for future spending. Last year's budget also ran a deficit although it was smaller than expected at only $0.1 Billion.
If the government continues to increase social spending, it will need to generate more revenues. Since GST is also a very large revenue source contributing the 2nd largest amount of tax revenue in 2014, small increases in GST can have large impact on government revenues.
As the government is afraid of scaring away international investors, GST is also attractive as it only affects the domestic population. However, such an increase would undoubtedly be unpopular with voters.
Would you support a rise in GST if it meant the government could do more to help the poor?
http://therealsingapore.com/content/analysts-singapore-may-see-gst-increase-10-next-few-years
