Prime Minister Lee Hsien Loong announced in parliament today that the government will increase the GST to 7%. This will definitely have a huge impact on SMEs and companies that absorb the GST. For those businesses that are not registered for GST taxes, it may be a good idea to consider voluntarily registering for GST now. Let’s discuss sensible moves that SMEs should take to minimize profit loss.
Related Video: GST to raise to 7%
“This is inevitable over the next 5 to 10 years. Infrastructure investments will cost money – R&D is to cost $5b over the next 5 years; as medical technology improves, people age and more will go to hospitals to get more treatment, so spending is bound to go up. As we tilt the playing field across the board, the lower income will be getting another boost, not just once in a while. Therefore its better to start building resources now so that when we spend more, we have the means to do so,” said Mr Lee.
To finance this, indirect taxes or the Goods & Services Tax will have to go up.
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