Singapore's goods and services tax will be increased by 2 percentage points 7 percent to finance social programs and help people with low incomes, local media cited the prime minister as saying Monday.
Lee Hsien Loong told Parliament that the GST will be raised from 5 percent to 7 percent, ChannelNewsAsia reported.
The details of the tax changes will be announced in the budget in February.
Lee said the GST report would come with a package weighted in favor of lower income Singaporeans.
"When we implement the GST increase, it's not a GST increase, it's a package which will fully offset the impact of GST for these groups and begin to strengthen the safety nets and tilt the balance in favor of the lower income Singaporeans," said Lee, according to radio station 938Live.
Lee also said income tax rates could be lowered in future, 938Live reported.
The radio station also reported that Lee said Singapore's constitution will be changed to allow the government to tap capital gains on state reserves.
And according to the government controlled media - a completely un-related matter which has absolutely nothing to do with the article above...
Singapore to cut corporate tax rate - media
14 November 2006
SINGAPORE: Singapore is prepared to cut its corporate tax rate to remain competitive in the global race for investments, Prime Minister Lee Hsien Loong was quoted by local media as saying.
Mr Lee said Singapore might have to adjust its current 20 per cent corporate tax rate if Hong Kong moved to lower its own 17.5 per cent rate, the Straits Times reported.
Mr Lee made the comments in parliament on Monday, where he also revealed plans to raise the Goods and Services Tax (GST) to 7 per cent from the current 5 per cent.
The Hong Kong government has proposed a GST to broaden its tax base, and says reductions in income or profits tax, or even both, would accompany any introduction of such a tax. But it is facing mounting public opposition to its plan.
"Hong Kong is competition for us," he said. "If they do a GST, they may decide to bring their corporate tax down. We may have to follow them down."
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