Ageing Singapore To Raise Key Tax For First Time In Years

Singapore announced Monday it would raise its sales tax for the first time in years to support an ageing population, but unexpectedly delayed the measure until at least 2021.

Singapore, (APP - UrduPoint / Pakistan Point News - 19th Feb, 2018 ) :Singapore announced Monday it would raise its sales tax for the first time in years to support an ageing population, but unexpectedly delayed the measure until at least 2021.

The tiny city-state has long had low taxes. Supporters say this has attracted global companies and wealthy expatriates, and helped to spur its rapid development from a down-at-heel port to an affluent financial hub.

But it is coming under pressure as the population ages and birth rates remain low, with the government expecting the number of those aged over 65 to double by 2030 -- meaning authorities have to find more money for healthcare and welfare.

Finance Minister Heng Swee Keat said the goods and services tax (GST) would be increased by two percentage points from 7.0 percent to 9.0 percent but not until sometime between 2021 and 2025. Heng also announced that spending on healthcare would increase to Sg$10.2 billion ($7.

7 billion) this year, over double the amount spent in 2011, as the government builds new hospitals and other healthcare facilities and raises healthcare subsidies.

"In the coming decade, with an ageing population and an increasing chronic disease burden, the demands on families and government will rise," Heng said as he unveiled the measure in Singapore's 2018 budget.

GST, which is levied on everything from buying a tv to visiting a spa, was last raised in 2007. Some analysts said the ruling party, which has been in charge for decades, may have decided to delay the GST rise to avoid inflicting economic pain on voters in the country of 5.6 million before elections due by 2021.

Increased spending on infrastructure, including a new airport terminal and a high-speed train connecting Singapore with the Malaysian capital, was also included in the budget, as was more money for measures to ward off the growing terrorism threat in Southeast Asia.