Tax & Accounting Blog

10% GST in Singapore? Government says no

Blog, Indirect Tax, ONESOURCE, VAT Tax Rates, VAT-GST Management September 1, 2015

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Singapore’s government has denied it will increase the GST from 7% to 10%. The government’s denials come because there is a persistent belief the GST will increase to 10% after the next general election. The A GST increase was also part of the 2011 election cycle in Singapore. It’s interesting to see how even the proposal of an increase has created such a backlash. There are even stickers with a cheeky slogan: “Say No to 10 per cent GST – vote wisely” and it has the ruling party’s logo.

Keep in mind the People’s Action Party has been the main political party in Singapore since its founding and did not produce the stickers.

Singapore’s GST rate at 7% is slightly higher than Malaysia’s new 6% GST but it is still low. Singapore’s rate has not changed since 2007 and is lower than most surrounding countries in the region which have rates closer to 10%.

However, the discussion about the GST increase in Singapore is relatively muted compared to the on-going discussion about the increase in the GST rate from 10% to 15% in Australia. The Australian changes could also involve broadening the tax base to include more items which are presently zero-rated. In Singapore, most items are already taxed including food and medicine which are zero-rated in Australia.