The increase in the GST rate from 8% to 9% is scheduled to take effect on 1st January 2024. This means that all eligible transactions occurring on or after this date will be subject to the new GST rate of 9%.
The GST rate change demonstrates Singapore’s commitment to maintaining a robust and sustainable fiscal framework while balancing the needs of the economy, as well as the welfare of its citizens.
Overview of GST rate change
In Budget 2022, the Singapore Minister for Finance announced that the GST rate will be increased over a two-year timeframe as follow:
- Increase from 7% to 8% with effect from 1 Jan 2023; and
- Increase from 8% to 9% with effect from 1 Jan 2024.
The increase in the GST rate aims to secure sustainable funding for Singapore’s expanding expenditure needs, including investments in healthcare, infrastructure development, and social support programs.
It also helps the country maintain long-term financial stability to meet the evolving needs of the citizens and provide necessary public services.
Which businesses are affected by this change?
The increase in the GST rate will impact businesses that are registered for GST and engage in taxable supplies.
- GST-registered businesses
Businesses based in Singapore with an annual turnover exceeding S$1 million (US$742,000) are required to register for GST and charge GST on all their taxable supplies.
- Taxable supplies
This term refers to the sales or purchases of goods or services that are subject to the standard rate of GST.
Examples of taxable supplies include the sale of most goods, provision of services, rental or lease of commercial properties, and imports.
GST-registered businesses can refer to the IRAS e-Tax Guide for detailed guidance on various aspects of GST, including registration, compliance, invoicing, filing returns, and more.
Conclusion
As the implementation date approaches, the government will provide further details on the specific measures, guidelines, and assistance schemes related to the GST rate increase.
Businesses and individuals are advised to stay informed through official sources, such as the government’s announcements, to obtain the latest updates and information.
Disclaimer: While BBCIncorp strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact BBCIncorp’s customer services for advice on your specific cases.
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