I had a shower thought as the Goods and Services Tax (GST) in Singapore will be raised gradually from 7% to 8% in 2023 and 9% in 2024. The government claims that raising GST is the most effective way of raising recurring revenue for the government to spend due to rapidly aging population and etc. 

"Tourists and foreigners in Singapore accounted for close to $3 billion, or about half of the net annual goods and services tax (GST) paid by households and individuals in 2018 and 2019, Senior Minister of State for Finance Chee Hong Tat said on Tuesday.

Tourists and foreigners residing here accounted for about 50 per cent of that, said Mr Chee. The top 20 per cent of resident households in Singapore accounted for another 20 per cent or thereabouts."

This is reported by The Straits Times which is one of the major newspaper in Singapore. The assumption is that the data is reliable and I will continue this post based on it. It seems that GST is a good way to raise more revenue as rebates can be given to citizens to offset the rise of GST and yet gather 50% more tax revenue as the rich and foreigners will not be eligible for the subsidies. This can only work if the government has good data and is able to target the middle class and lower income groups effectively.

However, the overall prices faced by everyone in Singapore will increase and most people will only be concerned that the price is increasing but they will not include the rebates as a form of cost reduction. This GST raise will still be unpopular but required for the long term budget balancing of the government.

Disclaimer: I am not working for the government or in the public sector. It is just a random thought.