Singapore to implement GST rate increase: A shift from 8% to 9% in 2024

2024 Singapore GST Rate Update

Starting 1st January 2024, Singapore’s Goods and Services Tax (GST) rate has increased to 9%, affecting all eligible transactions made on or after that date.

With the GST adjustment, the government demonstrates its commitment to creating a fiscal framework that meets the nation’s evolving needs, as the additional revenue generated is crucial to funding key areas such as health care, social services, infrastructure, etc.

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 follows:

• 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.