7% GST!

GST will be risened to 7% from the original 5%.
This was announced by PM Lee in Parliament today.

Aim is to increase the Social Safety Nets which is necessary to help the lower income group.

*Social Safety Net is basically means government aid to those in the lower income grp. Such aid maybe in the form of welfare or other things such as subsidies.

Also, there are also plans to give more grant to first time home owners and more "workfare" to entice those in the region of lower income to stay employed.

More details will be released on 15th Feb (Budget Day)

But in my opinion, I still think that the poor will be hit badly by this hike in taxes. Despite the promised lucrative package that will offset any impact of the rise in taxes to the poor. As usually due to the rise in GST. EVERYTHING will have a rise hike, even vegetables from the wet market.

Well, Singapore is now going through the stage where developed countries face all the time. Widening income gap.

I still think the best way to reduce this impact is to increase the income tax instead of GST since anyway who earn less have more tax relief. However with increased income tax, more of Singapore's elite would be turned-off and thus reducing the attractiveness of foreign talent coming in as well. However this would definately benefit the lower income group more as there is no direct impact on them.

Its tough being a decision maker. Haha.