The assurance package meant to cushion the impact of Goods and Services Tax (GST) hike has been increased to $6.6 billion, following Finance Minister Lawrence Wong’s announcement of an additional $640 million injection to the package.
The enhanced assurance package will provide significant payouts to Singaporeans over the next five years, said Wong during his speech.
Every adult Singaporean will receive cash payouts totalling $700 to $1,600. Eligible seniors will receive a special GST Voucher (GSTV) – Cash (Seniors’ Bonus) totalling $600 to $900, while eligible HDB households will receive additional U-Save rebates totalling $330 to $570, depending on flat type.
All Singaporean children and seniors will receive MediSave top-ups totalling $450, while all Singaporean households will receive two tranches of Community Development Council (CDC) vouchers worth $200 each in 2023 and 2024. The vouchers can be used at all participating heartland merchants and hawkers, as well as major supermarkets.
“For the majority of Singaporean households, the offsets from the assurance package will cover at least five years of additional GST expenses. For lower-income households they will receive more, with offsets covering about 10 years worth of additional GST expenses,” said Wong.
To further support vulnerable households, the government will top up the CCCs ComCare Fund by $5 million over five years, aside from a $12 million provision to self-help groups over four years.
The GSTV scheme which currently has three components — cash payout, MediSave top-up and utilities rebates will be enhanced in three ways. The service and conservancy charges rebate will be made a permanent component of the GSTV scheme, the assessable income threshold for the GTSV cash will be increased from $28,000 to $34,000, and the quantum of the GSTV will be increased.
The GSTV cash payout will be increased to $500 for those residing in homes with annual values of $13,000 and below. For those residing in homes with annual values between $13,000 to $21,000, the payout will be $250.
“The enhanced permanent GSTV scheme will provide continuing offsets for the GST expenses of lower to middle-income households and most retiree households beyond the transitional period covered by the assurance package,” said Wong.
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He added that the enhanced GSTV will fully offset the total GST that retiree households living in one to 4-room HDB flats have to pay. “Many retiree households and bigger flats will also have the GST offset by a significant amount. For low-income households who do not have elderly members, the GSTV will offset about half their total GST expenses every year,”
Both the assurance package and the enhanced permanent GSTV scheme will be implemented together before the GST rate increase.
“Besides the offsets in the assurance package, the permanent GSTV ensures that [low-income households] will receive significant support on a continuing basis. This is why the GST increase will not hurt low-income households. For them, the impact of the increase in GST will be neutralised,” said Wong.
Photo: Bloomberg
