GST rate to rise to 7% from July 1Posted: 15 February 2007 1735 hrs
The GST rate will be increased by two percentage points to 7% from
July 1st, said Second Finance Minister Tharman Shanmugaratnam in Parliament.
In his Budget Statement on Thursday, he said it is prudent to implement the increase now in one step, while the economy is still strong. This will raise additional revenues of $750 million this year and $1.5 billion per year going forward. Singaporeans will be compensated with a substantial offset package.
Mr Tharman said the GST Offset Package would cost the Government $4 billion in total over five years.
Of this, $1.8 billion will be given out as cash in the form of GST Credits. All adult Singaporeans will get them in annual instalments. The amount will depend on a person's assessable income and the annual value of his home. The average Singaporean household will get seven years' worth of GST offset.
Lower income Singaporeans will get larger GST Credits of up to $1,000 in four instalments of $250 per year over four years.
The top income group, earning $100,000 a year, will get $100. NS men and NSFs will get an additional $100 of GST Credits. The first instalment will be paid out on July 1st, at the same time as the GST increase. Older Singaporeans will also get more GST credits. Two thirds of the money will be given in cash and one-third will go into their Medisave on July 1 each year.
Utilities-Save, Service and Conservancy charges and rental rebates for eligible households will be extended for five years to March 2012.
The government will also give a one-off property tax rebate of up to $100 per year in 2008 and 2009 for all owner-occupied residential properties.
This will benefit about one million property owners, with three and four-room HDB flat owners paying little or no property tax.
For those with children, $400 will be credited into a secondary school child's post-secondary education accounts in 2008 and $400 in 2009.
Lower income families with young children will get increased financial assistance for kindergarten and childcare. More allowance too for pensioners, their gross pension ceiling raised from $1100 to $1140 a month. The government will give $10 million to the Public Transport Fund and will also top up the CCC ComCare Fund by $5 million over five years.
To help lower-income families, the Government will provide $2 million over five years to self-help groups and $3 million for government-funded VWO programmes.
Summarising, the second Finance Minister said most Singaporean households would receive the GST Offset package. The benefits will be seven times the extra GST they will have to pay each year.The lowest income households will receive the most - for instance, two roomers will get 16 years' worth of offset.
credits? as in like arcade games? 
