People will be given time to prepare for tax changes: Indranee

SINGAPORE — Singaporeans would be given “enough notice” ahead of tax hikes to make preparations of their own, Senior Minister of State (Finance and Law) Indranee Rajah said on Tuesday (Dec 5).

At the sidelines of a dialogue session on the upcoming Budget, reporters asked if the Goods and Services Tax (GST) would be raised next year and Ms Rajah said: “As I’ve said before, we’re working on the ‘what’ and ‘when’. So we’ll have to see. We’ll keep the public informed as and when we have arrived at a decision on that.”

She also stressed that the Budget — usually delivered in February or March — is a “financial plan” to position Singapore for the future.

Last week, the Development Bank of Singapore (DBS) published a research report stating that the GST is likely to be raised from 7 to 9 per cent when the Budget statement is made next year, with the projected hike being staggered over the next two years.

On whether she was concerned that it would be increasingly challenging for the Government to persuade Singaporeans on the need for higher taxes, Ms Indranee said that all Governments face the same challenge. “You have a range of things you need to do. How are you going to fund them?” she asked.

It is important for Singaporeans to know the Government’s direction, she added. “In our case, we’ve always explained to people what our objectives are and how (initiatives) are going to be funded. We do that every year with each Budget. This will be no different.”

Around 70 members of the public attended the Pre-Budget 2018 Conversation on Tuesday, co-organised by the Ministry of Finance and governmental feedback platform Reach.

During the session — hosted by Ms Indranee and Mr Sam Tan, chairman of Reach — participants raised concerns about cyber security, care for senior citizens, and re-training of workers.

At one point, businessman Nick Lee, 45, asked whether the Government is looking into tax adjustments. Again, Ms Indranee did not give an indication of timing for these. Instead, she said: Whatever we do, we will give people enough notice... to make preparations of their own (and) financial planning of their own.”

Mr Tan said that the Government does not raise taxes easily, and it takes a long-term view when making decisions. “Whether it’s taxes, cyber security, infrastructure, there’s always a reason,” he added.

Mr Lee, chief executive of IT products and solutions firm AIT Technologies, told reporters after the dialogue that next year is not the right time for taxes to be raised, because the global climate is too uncertain for such a move.

Giving a teaser on what is to come in the upcoming Budget, Ms Indranee talked about several areas of focus: Encouraging innovation and internationalisation for businesses, healthcare, and early childhood education.

In an informal poll conducted at the dialogue on what should be the highlight of the next Budget, a third of the participants (31 per cent) felt that supporting the vulnerable in society should be given the most weight. One in four thought that the focus should be on enabling people to improve their job skills (26 per cent) and helping businesses to thrive (24 per cent). Only one in five (19 per cent) indicated that building up the country’s infrastructure should be a key priority.