GST rate up from 7% to 8%
Singapore increases its goods and sales tax (GST) on 1 January 2023, from 7% to 8%. The hike is only the first of two planned increases in the GST rate as mentioned in the 2022 state budget. The second increase, also by 1%, will occur on 1 January 2024 to 9%. GST-registered businesses must prepare adequately for the upcoming rate change, such as by updating their invoicing and accounting systems, as well as communicating clearly to customers how the GST increase will impact them.
GST extended to imported low-value goods
The new GST rate now applies to any item valued up to S$400 – defined as low-value goods – bought from GST-registered sellers or platforms such as e-commerce sites and imported into Singapore by air or post. Such purchases were previously exempted from GST. The change aligns taxes for such goods with those brought in via sea or land, which were already subject to GST regardless of item value. GST is already applied to goods above S$400 brought in through air or post.
Increase in CPF contribution rates for those aged 55 to 70
The CPF contribution rates for employees aged above 55 to 70 will be increased to strengthen their retirement adequacy. The changes in CPF contribution rates for Singapore Citizens and Singapore Permanent Residents (from third year and onwards) will take effect from 1 January 2023. There is no change to the CPF contribution rates for other age groups.
Find out more about the revised CPF contribution rates.
Higher property tax rates in 2023
Property taxes will go up in 2023, with an upward revision of annual values for most residential properties. A property’s annual value, which is used to compute property tax payable by the property owner, is defined by the Inland Revenue Authority of Singapore (IRAS) as the estimated gross annual rent of the property, assuming the property is rented out. A recent media release by the Ministry of Finance (MOF) and IRAS states that annual values for most residential properties, including private property and HDB flats, will be revised from 1 January 2023. The revision is part of IRAS’s annual review and reflects the rise in market rents. “Since the last revision of annual values on 1 January 2022, market rents of HDB flats and private residential properties have risen by more than 20%,” the release adds.
Find out more about the revision in annual values.