During the Budget speech in Parliament, Singapore Finance Minister Heng Swee Keat described the bonus as a "hongbao" which in Mandarin means a monetary gift given on special occasions, saying that this "reflects the government's long-standing commitment to share of the fruits of Singapore's development with Singaporeans", reported Channel News Asia.
Rates for non-residential properties remain unchanged at 1 per cent to 3 per cent. The current rate is among the world's lowest for a consumption tax.
With an aging population, healthcare spending in areas ranging from hospitals to subsidies is forecast to surge over the next decade, having already increased from $3.9 billion in financial year 2011 to $10.2 billion in financial year 2018.
"This GST increase is necessary because even after exploring various options to manage our future expenditures through prudent spending, saving and borrowing for infrastructure, there is still a gap", the minister said.
The minister estimated that a two percentage point increase in GST will provide a revenue of nearly 0.7 percent of GDP per year. "But I expect that we will need to do so earlier rather than later in the period".
This budget, experts say, takes a significant step forward by setting a targeted strategy for the next decade, especially on the need for businesses to move away from cost competition and differentiate through innovation.
Heng said the government intends to lift the Goods and Services Tax by two percentage points, to 9 percent from 7 percent, sometime in the period 2021-2025.
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The injections will be delivered as part of a $31 million program. "This was driven by pandemic purchases in the U.S". Pharmacies such as CVS and Walgreens also benefited. "But there still is a lot of flu happening out there", said Dr.
"Currently, we spend up to 50 per cent of expected net investment returns, and keep the remainder in our reserves". "Second, we will enhance the permanent GST Voucher (GSTV) scheme when the GST is increased, so as to provide more help to lower-income households and seniors..."
For now, it is unclear if this could raise prices for end users, or if service providers will absorb at least part of the GST.
That change will apply from 1 January 2020 and will ensure Singapore's tax system "remains fair and resilient in a digital economy", Heng said in his speech.
Not only that, a new e-tax will also be implemented on certain digital services purchased from overseas suppliers.
The Inland Revenue Authority of Singapore (IRAS) said the B2B imported services would be taxed based on a reverse-charge mechanism, which required the local business clients to account for GST to IRAS on the services it imported.
Other examples of imported services include apps, listing fees on electronic marketplaces, software, and online subscription fees.