GST Increase from January 2024
With effect from 1st January 2024, the GST rate will be increased from 8% to 9% as planned and announced by the Ministry of Finance (MOF) in the 2023 Singapore Budget.
People in Singapore will feel the pressure of this unfamiliar period of inflation as the GST increase impacts most of local purchases and businesses, including our daily spendings such as groceries, food deliveries and dining. If you don’t already know, here are some key facts about GST in Singapore:
- GST Rate: The standard GST rate in Singapore w.e.f. 1st January 2024 is 9%. This means that most goods and services sold in Singapore are subject to a 9% GST.
- Taxable Goods and Services: The GST is levied on a wide range of goods and services. However, there are certain exemptions and zero-rated supplies. Common exempt supplies include financial services, residential properties, and most basic food items.
- GST Registration: Businesses with an annual taxable turnover exceeding a certain threshold are required to register for GST. Businesses can also voluntarily register for GST even if their turnover is below the mandatory threshold.
- GST Filing: Registered businesses are required to file periodic GST returns with the Inland Revenue Authority of Singapore (IRAS). These returns detail the GST collected on sales and the GST paid on purchases.
With the GST increase, what are some of the available assistance to cushion the impact of the increase?
- The Ministry of Social & Family Development had increase the CDC Vouchers for each Singaporean household from $300 to $500 for 2024. These CDC Vouchers can be used at selected participating merchants, supermarkets and retail outlets.
- The Singaporean Government had announced the increased in enhanced Assurance Package, which includes a Medisave top-up of $150 each year from 2023 to 2025 Singaporeans aged 20 years and below, or 55 years old and above, which may be used to offset the premium increase.
- The Assurance Package for GST also includes cash payouts of $700 to $1,600 over five years, for all Singaporeans aged 21 years and above.
- From 1 January 2024, local supermarkets will offer a 1% discount to offset additional increase in GST for 500 essential items for six months in Fairprice and three months in Sheng Shiong. Local supermarket group Giant will also absorb the 1% GST increase on 700 essential products across key categories such as fresh produce, personal care and household essentials
The Increase in Singapore’s GST rate may impact some of our Finances in Singapore, as some of us may feel the pinch in our daily spending. We can be prudent in our spendings by reducing our purchases in unnecessary things to help us cope better in our Finances.