Wednesday 15 February 2023

Singapore to tax and spend through global headwinds

Expansionary budget aims to soothe the sting of inflation and slowing growth but unpopular sales tax hike is still in the cards


Finance Minister Lawrence Wong expects “positive but slower” growth in Singapore this year due to high inflation and a slowing global economy, headwinds the city-state hopes to address through an expansionary budget designed to help households and businesses.

Unveiling a S$104 billion (US$78.4 billion) spending plan in parliament on February 14, Wong said Singaporeans will have to brace themselves for “a period of relatively higher inflation” that would remain elevated in the city-state at least for the first half of this year. Singapore’s headline inflation rate reached a more than decade-high of 6.1% in 2022, up significantly from 2.3% a year earlier.

Wong, who is also deputy premier and heir apparent to Prime Minister Lee Hsien Loong, stressed that while the economy has recovered to pre-pandemic levels, the country’s fiscal position remains tight, compelling the government to step up efforts to trim its budget deficit and raise revenue while pursuing a more targeted approach to aiding lower-income earners.

In what he previously described as his “Valentine’s Day present” to Singaporeans, Wong announced a slew of assistance measures including a S$3 billion ($2.26 billion) boost in subsidies to lower-income households to offset a higher goods-and-services tax (GST). He also announced higher taxes for multinational companies and on high-value properties and cars.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.