According to Today, one economist has predicted that it is only a matter of time before Singapore’s Goods and Services Tax (GST) will go up in the wake of news that the price of water is going to be increased by 30 percent.

This prediction was made by CIMB economist Song Seng Wun at the Economic Society of Singapore’s Panel Discussion Forum on post-Singapore Budget 2017 on Feb. 23, 2017.

Song said:

“I think the fact that we are finally charging a bit more for water after 17 years reflects that somebody forgot it hasn’t been done yet."

“The fact is that the GST was raised 10 years ago and water tax was (raised) 17 years ago.”

He spoke in response to comments about the issues stemming from the rise in social welfare related costs raised by fellow panellists Walter Theseira, a SIM University senior lecturer and Chua Hak Bin, a senior economist at Maybank Kim Eng.

A 3 percent GST was first introduced in Singapore on April 1, 1994.

In 2003, it was increased to 4 percent and then 5 percent in 2004.

The last increase was in 2007 to 7 percent.

A GST increase is, therefore, due some time in the future.

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The panel also said any increase in GST will help in Singapore's social expenditure, which has been on the rise since 2012.

Social expenditure includes education, healthcare and national development.

However, one of the issues of raising GST in the future is whether it is applicable to online sales that have so far largely avoided being taxed.

H/T Today

Top photo via Changi Airport