GST Got You Stressed? Here’s the Tips for Youth on Singapore’s Latest Tax Twist

As the fireworks lit up at MBS, I’m sure you were concerned that Singapore’s GST went up to 9%! Don’t scratch away. Whether you are a current college student, a recent graduate looking for a job, or a postgraduate working part time, this policy is significant in various aspects of your life, be it on your exam papers, bank statements, or even on the receipts from your milk tea purchases. Join me to understand this policy in detail and strategise for your future.

Singapore is set to experience a significant change in its Goods and Services Tax (GST) rate, marking a pivotal shift in the nation’s taxation landscape. Singapore’s Goods and Services Tax (GST) is set for a two-step increase: from 7% to 8% in January 2023, and already to 9% in January 2024. This hike aims to support increased healthcare expenditure and the ageing population. To mitigate the impact, the government enhanced the Assurance Package from $6.6 billion to over $10 billion, covering additional GST expenses for most households for up to 10 years, especially benefiting lower-income groups through the GST Voucher Scheme.

Additionally, the GST Voucher Scheme remains a cornerstone of the government’s support system, specifically targeting Singaporean households in the lower to middle-income categories. This scheme is a testament to the government’s commitment to ensuring equitable financial support during this period of economic adjustment.

So, the government has turned the dial up on excise duty, and guess what? It’s not just a bunch of suits in a meeting room feeling the heat. This change is like a new seasoning in our Singaporean melting pot—some find it spicy, others think it’s just the right kick. It’s a national policy, sure, but it’s also as personal as that extra dollar on your kopi-o. While it’s meant to give a financial leg-up to our healthcare and elderly, our wallets are doing a little dance of their own. And oh, the chatter it has sparked! From the heartlands to the high-rises, everyone’s got a take. Let’s dive into the digital ‘kopitiam’ where netizens are serving up hot takes on this tax hike. Some are brewing optimism, while others are stewing in skepticism. Ready for a taste of these diverse opinions? Let’s sip through the buzz and see what’s brewing among our fellow Singaporeans.

Netizen A said, “Now that most restaurants have adopted scanning QR codes to order, where can I still see the service? The service charge has gone up.”

Netizen B said, “A bowl of Yeung Kwok Fook Hot & Spicy is as high as SGD 39! I can’t afford it anymore. “

Netizen C: The GST and service tax together can cover a meal!

Of course, there are some indifferent attitudes.

Netizen D: “I’ll still eat it; I’ll get used to it after a few weeks. “

This spectrum of responses paints a vivid picture of how such financial policies are more than just numbers; they’re a daily reality that stirs up a potpourri of emotions and opinions in our vibrant city.

In addition to the GST increase in 2024, utility bills and even education fees have also been announced to rise. The tuition fees for International Students (IS) in Singapore studying in government schools or government-aided schools will be going up every year from 2024 to 2026. The Ministry of Education (MOE) has announced the exact changes in tuition fees for different school years on its official website.

What are the implications of these changes for those who are not yet working or fresh graduates?

Increased Cost of Living: The GST hike is set to raise daily living costs in Singapore, affecting essentials like food, clothing, and entertainment. This change is particularly significant for young people, including students and early-career professionals, who may find their budgets strained.

Higher Education Expenses: Educational materials and services are likely to become more expensive due to the increased GST. Students may face higher costs for textbooks, course materials, and other educational resources.

Impact on Part-Time Work: Many youths depend on part-time jobs for their educational and living expenses. The GST rise could lead to higher costs for products and services, potentially affecting the businesses that employ young people and, consequently, their job opportunities and earnings.

Effect on Savings and Investments: For young adults starting to save or invest, the GST increase could diminish their disposable income, impacting their ability to set money aside or invest in long-term goals like education, business ventures, or home ownership.

Increased Cost for Big-Ticket Purchases: The GST hike will make significant purchases, such as cars or electronics, more costly. This is a particular concern for young adults planning to invest in these high-value items.

Effect on Loan and Credit Services: The increased GST may also influence the cost of financial services, including loan interest rates and credit card fees, affecting young adults who utilise these financial instruments.

Okay, so here’s the tea: GST in Singapore just levelled up to a whole 9%—and yeah, that’s a major oof for the wallet, especially for us young folks. It’s like, one minute you’re bingeing on bubble tea and the next, your bank app is serving you a reality check. But fear not, squad, because we’ve got some legit hacks on deck to help you keep your cash flow on fleek, even with GST doing its thing. So, swipe right on these strategies, ’cause we’re about to spill all the deets on how to slay your finances in a GST-upped world.

Utilising Government Support: Young people should be informed about the government’s Assurance Package payouts and GST vouchers, which can help offset the increased cost due to the GST rise. They can check their eligibility for these benefits through government portals.

Seeking GST-absorbed Goods and Services: Patronise businesses that are absorbing the GST increase, such as certain supermarkets and retail stores, to avoid the additional costs.

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Income Augmentation: Encourage part-time work or freelancing in sectors less affected by the GST rise. Additionally, seek out job opportunities with businesses that have indicated they will not pass on the increase to consumers.

Access to Financial Services: For young adults who may need assistance in managing the financial impact of the GST increase, our firm provides loan services tailored specifically for their needs. Whether it’s for educational expenses, big-ticket purchases, or to cover temporary cash flow shortfalls, teens can apply for a loan with us. We offer competitive rates and flexible repayment plans to ensure they can invest in their present needs and future ambitions without the added stress of the GST hike. By using our loan services, they can spread out the cost of larger expenses and manage their budgets more effectively during this period of financial adjustment.

 

And there you have it, fam—the lowdown on our not-so-fave new character in the Singapore saga: Mr. 9% GST. He’s the unexpected guest who’s decided to crash our budgeting party, spiking everything from our fave snacks to our future dreams. But just like those TikTok dances, we’ll adapt, conquer, and find new moves to keep our bank accounts from crying. Remember, we’re resilient, resourceful, and ready to turn those financial lemons into some sweet lemonade (minus the extra GST, of course).

So, while your wallet might be feeling a bit shook right now, know that we’re all in this together. Stay savvy with your spends, get those government goodies, and keep hustling hard. And hey, if you ever need a cash cushion for those bigger dreams, you know who’s got your back with a loan that doesn’t ghost you.

Keep your spirits high and your spending smart, because this is just another level we’re going to beat on the epic game of Adulting. Game on, GST—let’s show ’em how Gen Z does it!