Singaporean Soif Noor has already bought furniture and appliances for his new home, four months before he can move in. Like many residents, he’s been on a spree – because on Jan. 1 Singapore’s sales tax goes up for the first time in 15 years.
From next year, the sales tax on everything from groceries to diamond rings goes from 7% to 8%. Barring a sharp global economic downturn next year, it will then rise to 9% in 2024 as the city state of 5.6 million people raises revenue to support its ageing population.
Overall, economists say the impact of the one percentage point tax hike may be muted, with a consumer spending surge before the rise likely to be offset by a drop afterwards. But for residents like Soif, it’s a significant trigger.
“A 1% increment may be small, but any savings help in this inflationary environment,” the 28-year-old engineer told Reuters. By buying everything now before the hike, Soif said he’s saving S$250 ($185) on his purchases, now in storage at retailers’ facilities.
Soif said some of his male colleagues are rushing to get engagement rings, being urged by girlfriends to “propose now – if not it will be more expensive next year”.
This report’s information was first seen on REUTERS; to read more, click this link.
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