Citing inflation risk, Workers' Party opposes govt decision to go ahead with GST hike

SINGAPORE — The Workers' Party (WP) said on Wednesday (June 22) that it "cannot support" the Government's decision to go ahead with the planned Goods and Services Tax (GST) hike in the midst of inflation concerns, and it will "continue to argue" against any increase in the consumption-based tax.

The WP statement, posted on Facebook, came after Deputy Prime Minister Lawrence Wong said on Tuesday that the timing for the tiered tax hike will not be revised despite concerns over inflation. The GST is set to rise from 7 per cent to 8 per cent on Jan 1 next year and then to 9 per cent in 2024.

Mr Wong, who is also Finance Minister, was speaking at a press conference to announce a S$1.5 billion support package to help Singaporeans deal with rising costs. 

In its post, WP said that the support package was "a step in the right direction" but devoted most of the post, in graphic form, to opposing the GST hike.

"The Workers' Party will continue to argue against the proposed GST increase in Parliament, as well as for alternative forms of revenue generation such as wealth taxes or raising the reserves contribution ceiling," it said in its post. 

The party added that earlier this month, analysts said that inflation this year is expected to hit 5 per cent, up from the 3.6 per cent forecast in an earlier survey released by the Monetary Authority of Singapore (MAS). 

"Yet, the Government still wishes to press ahead with raising the GST rate from 7 to 9 per cent in two stages," WP said. "The Workers' Party cannot support this." 

WP repeated the points made by its secretary-general and Leader of the Opposition Pritam Singh in a speech earlier this year.

Mr Singh had said that there have been "several proposals" raised by WP in Parliament, on both taxes and the adjustments to the reserves framework. 

"These options do not constitute a raiding of the reserves as the PAP (People's Action Party) enthusiastically and inaccurately portrays," he had said. 

Mr Wong said on Tuesday that the Government had already debated extensively on the need to increase the GST from 7 per cent to 9 per cent. 

It had already examined various possibilities such as property tax and luxury car tax to bring in extra revenue, but these alternatives will not be enough to support the nation’s spending needs, he added.

However, Mr Wong said the Government recognises that there are uncertainties ahead, which is why it has pushed back the hike to "as late as possible" and is "handing out a generous offset package".