Reminder that the Goods & Services Tax will be hiked to 9% from the 1st of January 2024

In 2022, the Minister for Finance announced that the GST rate will be raised in 2 steps, from 7% to 8% on 1 Jan 2023 and from 8% to 9% on 1 Jan 2024. The revenue from the increase in GST will go towards meeting our medium-term needs including supporting our healthcare expenditure, and to take care of our seniors.

To help Singaporeans cope with the impact of the GST increase, the Government enhanced the Assurance Package from $6.6 billion in Budget 2022 to $9.6 billion in Budget 2023, and over $10 billion in September 2023. The enhancements at Budget 2023 and September 2023 accounted for the higher inflation and provided additional support to Singaporeans to address cost-of-living concerns. The Assurance Package continues to offset additional GST expenses for majority of Singaporean households for at least 5 years. For lower-income households, the Assurance Package can cover additional GST expenses for around 10 years.

Beyond the Assurance Package, eligible Singaporean households, especially the lower to middle income families, will also continue to benefit from the permanent GST Voucher Scheme and the absorption of GST for publicly subsidised education and healthcare.

We round up the essential information you need to know about price displays and payments made in 2023 for goods and services to be delivered in 2024.

Price Displays -- What Should I See?

GST-registered businesses must display GST-inclusive prices on their price displays to the public. What you see must be the final price you pay. From 1 January 2024, the prices displayed by GST-registered businesses must be inclusive of GST at 9%[1]. Businesses that are unable to switch their price displays overnight may display 2 prices:

• One applicable before 1 Jan 2024 showing prices inclusive of GST at 8%

• One applicable on/after 1 Jan 2024 showing prices inclusive of GST at 9%

[1]When purchasing from 24-hours stores from 12 a.m.  to 7 a.m. on 1 Jan 2024, you may be charged GST at 8% on your purchase if it is the supplier's normal accounting practice to treat the sales made during this time as sales of the preceding day.

An exemption is granted to hotels and F&B establishments[2] that impose service charge on their goods and services. They are not required to display GST-inclusive prices for goods and services that are subject to service charge to ease their operations. However, they must still display a prominent statement informing customers that the prices displayed are subject to GST and service charge.

Businesses that do not comply with price display requirements may be subject to a fine. Businesses cannot charge and collect GST at 9% before 1 Jan 2024.

[2] Excluding hotels and F&B establishments that do not impose a service charge, and F&B establishments that levy a nominal service charge without genuine business reasons other than to avoid displaying GST-inclusive prices.