So many of us have been wondering the last few weeks if the government, for real, want to make GST go higher?
It’s confirm plus chop! GST will increase… but only from 2023!
The GST will go up from 7 %t to 9% in two phases- first on Jan 1, 2023, from 7% to 8%, then 8% to 9% in 2024.
After that announcement, my phone like want to explode, you know. All the WhatsApp messages started coming in. One said, next year onwards, poor will become broke! One more say give chicken wing then the whole chicken they take back next year.
I read until my head so pain. Then, I quickly tell Abang to get my peppermint essential oil because I want to gosok (apply) oil on my forehead.
You know what he said?
“You so atas? Everyone using Tiger Balm, Axe oil when they have a headache. You use peppermint oil. Next year onwards, GST going up, remember ah!”
This old man, purposely want to trigger me.
So I told him, “Mr. Lawrence Wong already say property price and road tax all going up. So, you can stop berangan (daydream) want to buy bigger house, buy second car and all that.”
“Haiyah….I remind you only. Small thing also get so angry.”
After that, we cold war till today.
Over the weekend I was thinking about our ‘discussion’.
Luckily GST go up only by 2%
All of us are indeed struggling with prices going up. And this GST hike will increase prices for EVERYTHING- from daily essentials at your neighborhood pasar to big-ticket items like an ehem ehem… a new Chanel bag.
However, Kakak feels it’s a necessary evil.
Remember when Zikri told me the government had drawn billions from the reserves the last two years and we need to rebuild public finances by 2025?
To balance the budget, by right, our GST should be in the range of 21% to 27%.
This is because GST revenue in 2022 is projected to reach S$12.8 billion, at the current rate of 7%. For each percentage point of GST, Singapore collects about S$1.75 billion.
So if you want to balance the budget, you only have two choices. Either go big (and charge GST at over 20%) or go home (and wait long-long)?
But Singapore can keep our GST low because of the profits generated from the investment of national reserves called Net Investment Returns Contribution (NIRC).
Long story short, the NIRC accounts for over 20% of the national budget and is the single largest source of revenue. Without NIRC, our government must find a way to make do with whatever they collect in taxes.
So if our NIRC can generate so much, why must still increase GST?
Because it’s not a bottomless pit.
When he was little, your Abang and I opened a savings account for Zikri. Birthday money, Hari Raya money all go into that.
Then when he turned 18, we gave him the ATM card and said these savings can be something he fall back on.
Luckily Zikri is prudent like me. So he makes sure to save some from whatever little money he earned during NS. Anyway, your Abang and I always tell him that he can always let us know if he needs money for anything.
But Singapore got no chance of turning to anyone if savings run out.
If anything, what we should do is grow our reserves so that we can continue to keep our taxes to a minimum and possibly have enough for our future generations to help them grow and use in their times of need.
COVID was a surprise and turned many lives upside down
The reserves kept many of us afloat.
And now, with many COVID measures are easing up, it is no longer necessary to go on panic mode and dip in our reserves again. So, what comes next then? First, of course, to save back lah.
But I think the government is also aware that we all are also ‘suffering’ with inflation, so they give chance a bit – impose a GST hike next year.
And I’m sure you also realize that, concurrent with the GST hike, social spending in the form of targeted help also increased.
Which ones did you say? Come, Kakak, compile for you here.
- Cash payout for every Singaporeans for the next five years: $700-$1,600
- Additional CDC vouchers for Singaporean households over 2023 and 2024: $400
- GST Voucher (Seniors’ Bonus) for eligible seniors 55 years and above over next three years: $600 – $900
- Additional GSTV- U Save rebates for eligible households over the next four years: $330 – $570
- Higher GSTV cash payout for eligible Singaporeans: $500
- Medisave top-up for Singaporeans 20 years and below and seniors aged 55 and above, over next three years: $450
So not right also to say the government is inconsiderate and poor people will continue to suffer. If anything, these measures show those in need will get direct help to reduce their expenses.
Then for those who say give a chicken wing and take back a chicken may not also be a fair statement when you consider all the money invested in making our surrounding infrastructure and developments better.
The way all Singapore Budgets have been planned is for every dollar collected will go back to its people in one way or another. Be it in the payouts to the disadvantage, financial assistance for workers, quality education for our younger generation, and (this one is important to Kakak) healthcare subsidies, especially since our aging population is quite high!
Just like what Mr. Wong said during his Budget speech last week, “No one likes to talk about taxes. But there are no painless solutions. Ultimately, every need must be paid by someone – every dollar not paid by one person will have to be made up by someone else, either today or in the future.”
Does that mean that those who have the means to spend and do not qualify for any financial assistance or schemes like Kakak here will just need to suck thumb?
Unfortunately, there is no government, no policies, no one way that can benefit everyone and make all happy.
We do our part and carry others who cannot contribute as much. We don’t leave anyone behind or let anyone walk alone. We must expect that those with more will contribute more.
We help others; who help us?
If you’re asking this question, that means you’re in a decent place, so Kakak say maybe need to “ownself-check-ownself”?
Electricity bills are super high, don’t use aircon so much. Want coffee? Choose Kopitiam instead of Starbucks. Petrol prices, road tax, ERPs stressing you out? Take public transport.
Please don’t kecam (scold) your Kakak here. This is just my opinion, lah.
Coming back to my peppermint essential oil.
It’s true what Abang said. This peppermint oil is not cheap. The price of one bottle is equivalent to maybe five bottles of Axe oil. Both oils will do the trick. Just that Axe oil gives me ‘makcik’ vibes.
But if I want to save money, and people promote me from Kakak to Makcik, then so be it lor.
So, even though the GST increase will only start next year, Kakak think better start looking out for the best deals to save money.
I heard from my neighbor Sui Heng that she got lobang for good discounts. 5% off every Friday, you know. So she said I can get my ayam, fishball, onions and tomatoes all at a discount!
Finally, a piece of good news.
Suddenly I feel like cooking Mee Goreng and fried chicken wings for breakfast tomorrow.
Your Abang’s favorite, you know? Then maybe he can start talking to me again. I give him chance!