Singapore is hiking its GST, but not until 2021 or later

Singapore plans to hike its sales tax to 9 percent from 7 percent, but said the change will only be made “sometime” between 2021 and 2025. (Reuters)
Updated 19 February 2018
0

Singapore is hiking its GST, but not until 2021 or later

SINGAPORE: Singapore confirmed it plans to hike its sales tax to 9 percent from 7 percent, but said the change will only be made “sometime” between 2021 and 2025.
Pushing a change till at least three years away surprised some, after policymakers had flagged before Monday’s budget speech that Singapore must increase revenue to meet future spending needs of its rapidly aging population.
“The exact timing will depend on the state of the economy, how much our expenditures grow, and how buoyant our existing taxes are. But I expect that we will need to do so earlier rather than later in the period,” Finance Minister Heng Swee Keat told parliament.
“This GST increase is necessary because even after exploring various options to manage our future expenditures through prudent spending, saving and borrowing for infrastructure, there is still a gap.”
One tax change that will take place in 2019 is with carbon tax, which will stand at S$5 per ton of greenhouse gas emissions from 2019 to 2023. The plan is to increase it to between S$10-S$15 per ton by 2030.
Singapore introduced a GST in 1994, with a 3 percent rate. This was raised to 4 percent in 2003 and 5 percent in 2004, then to 7 percent in 2007.
Nine of 10 economists polled by Reuters had expected the government to hike the GST rate, which is one of the world’s lowest rates for consumption taxes.
The budget statement came after Singapore’s trade-reliant economy recorded full-year growth of 3.6 percent in 2017, the highest in three years, getting a boost from a recovery in global demand.


China says hard to proceed on trade with US putting ‘knife to its neck’

Updated 24 min 10 sec ago
0

China says hard to proceed on trade with US putting ‘knife to its neck’

  • When the talks can restart would depend on the ‘will’ of the US, senior Chinese commerce official says
  • Several rounds of Sino-US talks in recent months have appeared to produce no breakthroughs
BEIJING: A senior Chinese official said on Tuesday that it is difficult to proceed with trade talks with the US while Washington is putting “a knife to China’s neck,” a day after both sides heaped fresh tariffs on each other’s goods.
When the talks can restart would depend on the “will” of the US, Vice Commerce Minister Wang Shouwen said at a news conference.
US tariffs on $200 billion worth of Chinese goods and retaliatory taxes by Beijing on $60 billion worth of US products including liquefied natural gas (LNG) kicked in on Monday as the trade dispute between the world’s two biggest economies escalated, unnerving global financial markets.
China also accused the US of engaging in “trade bullyism,” and said Washington was intimidating other countries to submit to its will, according to a white paper on the dispute published by China’s State Council, or cabinet, on Monday.
“The sharp criticism (from Beijing on Monday) suggests that China might prefer to wait out the current US administration, rather than embarking on potentially futile negotiations,” Mizuho Bank said in a note to clients.
“Given these developments, it is increasingly likely that both sides will not resume negotiations for some time, at least until there is a noticeable shift in the political mood on either side.”
Several rounds of Sino-US talks in recent months have appeared to produce no breakthroughs and fresh negotiations which had been expected in coming weeks have been canceled after Beijing reportedly decided late last week not to send a delegation to Washington.
One cannot say that all previous trade discussions have been useless, but the US has abandoned its mutual understanding with China, Wang said.
China does not know why the US has changed its mind after reaching an agreement with China on trade earlier, Wang said, apparently referring to talks in May when it appeared briefly that a framework was being sorted out.
US exporters including LNG suppliers would “certainly” be hurt, but Beijing’s retaliation would provide opportunities to other LNG-exporting countries, Wang said, adding that Australia is an important source of the fuel for China.
“China is a big and powerful nation, so whether it is a confrontation with China economically or militarily, it would come at a huge price,” the state-backed Global Times wrote in an editorial on Tuesday.
“As such, it is an attractive prospect for other countries including the US to coexist with China peacefully,” said the newspaper, which is published by the ruling Communist Party’s People’s Daily.