Goods and Services Tax (Abbreviation: GST; Chinese: 消费税) was introduced in Singapore on April 1, 1994 at 3%, but later increased to 4% on January 1, 2003 and 5% on January 1, 2004. It is slated to rise to 7% though it is yet to be implemented. Abbreviation (from Latin brevis short) is strictly a shorter form of a word, but more particularly, an abbreviation is a letter or group of letters, taken from a word or words, and employed to represent them for the sake of brevity. ... April 1 is the 91st day of the year (92nd in leap years) in the Gregorian calendar, with 274 days remaining. ... 1994 (MCMXCIV) was a common year starting on Saturday of the Gregorian calendar, and was designated as the International Year of the Family and the International Year of the Sport and the Olympic Ideal by United Nations. ... January 1 is the first day of the calendar year in both the Julian and Gregorian calendars. ... 2003 (MMIII) was a common year starting on Wednesday of the Gregorian calendar. ... January 1 is the first day of the calendar year in both the Julian and Gregorian calendars. ... 2004 (MMIV) was a leap year starting on Thursday of the Gregorian calendar. ...

Singapore’s GST is a broad-based consumption tax levied on import of goods, as well as nearly all supplies of goods and services. The only exemptions are for the sales and leases of residential properties and most financial services. Export of goods and international services are zero-rated.

Objectives

The GST was introduced as part of a larger tax restructuring exercise, to enable Singapore to shift its reliance from direct taxes to indirect taxes. The GST also enabled Singapore to sustain a lower income tax rate.

The government argues that with an aging population, Singapore’s income tax base was expected to decline. With a broad-based GST, the taxation burden will be more evenly spread among the population. Thus, the GST was introduced as part of a larger exercise to put in place a tax structure to see the country into the future.

A value-added tax like GST also has several features that make it attractive. Being a tax on consumption, and not on income, the tax system inherently encourages savings and investments instead of consumption. The tax also has a self-policing mechanism that discourages evasion, unlike in a retail sales tax system or an income tax system where it would be relatively easier to scheme to evade taxes.

Proposed GST increase to 7%

More details of the GST increase will be announced on 15 February 2007, which is Budget Day. Prime Minister Lee Hsien Loong added that Second Finance Minister Tharman Shanmugaratnam would deliver the Budget speech. This is a Chinese name; the family name is 李 (Li). ... Tharman Shanmugaratnam is Minister for Education in the Singapore Cabinet. ...

References

• GST to be raised to 7%: PM Lee
• GST in Singapore: Policy Rationale, Implementation Strategy & Technical Design