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New year, new taxes. 2024 heralds the the inevitable hike in Singapore’s Goods & Services Tax (GST). Not that we want to put a damper on the start of the new year, but here’s a timely reminder that GST has hit 9 percent as of January 1, 2024. We are, after all, the world's most expensive city – a title we've held nine times in 11 years.
This increase in GST is the second of a two-tiered raise, whereby the first stage kicked in on January 1 2023, with the tax amount bumped up from 7 percent to 8.
Here’s everything you need to know about the latest GST increase in Singapore.
Why is GST increasing in 2024?
According to the government, the increase in GST comes about because of Singapore’s increase in healthcare expenditure, the maintenance and improvement of our infrastructure, as well as the need to support the ageing population.
What were past GST rates like over the years?
GST was first introduced in 1994, at three percent. This was increased to four percent nine years later in 2003, five percent in 2004, and seven percent in 2007. The raise from seven percent to eight percent happened in 2023 – the first increase in 16 years.
Is GST going to increase to 10 percent soon?
At present, there’s been no talk of GST increasing to 10 percent in the near future – thank goodness – but with the rate at which inflation is happening in Singapore, there’s no ruling this possibility out.
Having paid for something in advance, can I avoid the GST hike?
In short, yes, it is possible to escape the GST hike if you’ve paid for something in full before end 2023. This would usually be applicable to things like beauty treatments, home renovation packages, and bookings for wedding-related goods and services, such as photography or gown rental.
While one percent might sound negligible, it can be a hefty amount when it comes to big-ticket items priced in the four- or five-digit range, hence good on you if you've locked down such purchases before December 31, 2023.
Do note that you won’t be able to skip the raised GST rate if you’ve merely made a deposit in 2023 and are paying the remaining balance in 2024. While payments made in 2023 are subject to eight percent GST, any additional payments for the same item in 2024 will be subject to the new GST rate of nine per cent. The same goes for instalment payments, whereby any outstanding payments done in 2024 will be taxed at nine percent, not eight.
To avoid any confusion or potential misunderstandings, contact the store or vendor which you’re purchasing from to get clarification regarding payment in relation to the tax hike in black and white. Read more about the terms and conditions of the GST rate change for consumers via the Inland Revenue Authority of Singapore (IRAS’) website.
Daiso Singapore’s new prices from January 2024 onwards
Japanese budget lifestyle store Daiso first introduced GST in their Singapore stores a couple of years back in May 2022, putting their once-$2 nett items at $2.14. In 2023, this got raised to $2.16 to reflect the 8 percent GST rate. Similarly, their knick-knacks cost a standard $2.18 from January 2024 onwards.
When paying in cash, this amount would likely be rounded up to $2.20 instead, so you might want to pay by card to avoid losing an extra two cents. While you can’t actually buy anything with those two cents saved via this little ‘hack’, you know how the saying goes – take care of the cents, and the dollars will take care of themselves.
Stores in Singapore that are absorbing the GST increase
A couple of brands and businesses are kindly absorbing the GST hike, either for a temporary period of time or until further notice, so as to ease the burden on consumers. Some of these include supermarkets like Giant, Sheng Shiong and FairPrice, home and living store Ikea, and even croissant bakery, Brotherbird Bakehouse. Check out the full list here.
Government support for Singaporeans in light of the GST hike
There are a couple of planned measures to help Singaporeans cope with the latest GST hike, namely Assurance Package payouts, and GST vouchers for those in lower income groups.
Assurance Package payouts in 2024
- Cash payouts from $200 to $800 each year
- For all Singaporeans aged 21 and above
- Find out more and check your eligibility here.
GST vouchers in 2024
- Cash payouts, MediSave top-ups, and U-Save rebates to offset utility bills
- For eligible Singaporeans aged 21 and above, where income earned in the Year of Assessment must not exceed $34,000
- Check out the full terms and conditions for eligibility here.
Do I need to sign up for GST vouchers and other payouts?
There’s no need to sign up for GST vouchers if you were a recipient of past government payouts; the amount will be automatically credited to your bank account. If you have yet to sign up, you can do so online via the official GST voucher website.
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