GST rate to increase to 7% from July 1
Posted: 15 February 2007 1735 hrs
The GST rate will be increased by two percentage points to 7% from
July 1st, said Second Finance Minister Tharman Shanmugaratnam in
Parliament.
In his Budget Statement on Thursday, he said it is prudent to
implement the increase now in one step, while the economy is still
strong.
This will raise additional revenues of $750 million this year and
$1.5 billion per year going forward.
Singaporeans will be compensated with substantial offset
package.
Mr Tharman says the GST Offset Package will cost the Government $4
billion in total over five years.
Of this, $1.8 billion will be given out as cash in the form of GST
Credits.
All adult Singaporeans will get them in annual instalments.
The amount will depend on a person's assessable income and the
annual value of his home.
The average Singaporean household will get seven years' worth of
GST offset.
Lower income Singaporeans will get larger GST Credits of up to
$1000 in four instalments of $250 per year over four years.
The top income group, earning $100,000 a year will get $100.
NS men and NSFs will get an additional $100 of GST Credits.
The first instalment will be paid out on July 1st, at the same time
as the GST increase.
Older Singaporeans will also get more GST credits.
Two thirds of the money will be given in cash and one-third will go
into their Medisave on July 1 each year.
Utilities-Save, Service and Conservancy charges and rental rebates
for eligible households will be extended for five years to March
2012.
The average Singaporean households will get seven years worth of
GST offset.
The government will also give a one-off property tax rebate of up
to $100 per year in 2008 and 2009 for all owner-occupied
residential properties.
This will benefit about one million property owners, with three and
four-room HDB flat owners paying little or no property tax.
For those with children, $400 will be credited into a secondary
school child's post-secondary education accounts in 2008 and $400
in 2009.
Lower income families with young children will get increased
financial assistance for kindergarten and childcare.
More allowance too for pensioners, their gross pension ceiling
raised from $1100 to $1140 a month.
The government will give $10 million to the Public Transport Fund
and will also top up the CCC ComCare Fund by $5 million over five
years.
To help lower-income families, the Government will provide $2
million over five years to self-help groups and $3 million for
government-funded VWO programmes.
Summarising, the second Finance Minister says most Singaporean
households will receive the GST Offset package.
The benefits will be seven times the extra GST they will have to
pay each year.
The lowest income households will receive the most - for instance,
two roomers will get 16 years' worth of offset. - CNA/ch
look like they are more desperate than we
thought 
