Projection of FY2023 Tax Revenue Growth and Impact on Additional Help for Singaporeans to Deal with Inflationary Costs

17 Mr Ang Wei Neng asked the Deputy Prime Minister and Minister for Finance in view of the record high tax revenue in the last financial year ending 31 March 2023 (a) whether the Ministry expects the tax revenue growth trend to continue for the rest of the current financial year; and (b) whether the Government will consider additional monetary payouts to Singaporeans, over and above those that have been announced, to combat inflation rather than waiting for the next Budget in 2024.

The Senior Minister of State for Finance (Mr Chee Hong Tat) (for the Deputy Prime Minister and Minister for Finance): Mr Speaker, our tax revenue collections have grown broadly in line with Gross Domestic Product (GDP). The higher tax revenue collection in financial year 2022 (FY2022), compared to the previous year, was due to our economic recovery after the COVID-19 pandemic. While some of this growth momentum has benefited tax revenue collections in FY2023, it is unclear whether the trend can continue due to the uncertain global economic outlook.

The Government understands that cost of living remains a key concern. That is why we had enhanced the Assurance Package to $9.6 billion in Budget 2023 to provide Singaporeans with additional financial support. More support is provided to lower- and middle-income families, as well as seniors staying in both public and private estates.

As Prime Minister Lee mentioned at the 2023 National Day Rally, the Ministry of Finance (MOF) is currently studying further enhancements to the Assurance Package. We will announce more details shortly, after the review is completed.

Mr Speaker: Mr Ang Wei Neng.

Mr Ang Wei Neng (West Coast): Thank you Speaker, and thank you to the Senior Minister of State for the comprehensive reply. Will the Senior Minister of State be able to shed some light on whether the amount of tax collected in the first quarter of FY2023, which means from May up to August this year, has increased as compared to the same period in the last financial year?

Secondly, we understand that MOF is reviewing to enhance the Assurance Package. Will the Senior Minister of State be able to shed light on whether it will come in the form of cash or some vouchers? Because giving vouchers would have an expansionary effect on the economy, where they have to spend. But if you give cash alone, people may put that in their savings, and they do not spend.

Mr Chee Hong Tat: Mr Speaker, the tax collection, as I mentioned in my reply earlier, is in tandem with the performance of the economy and the GDP. There is a bit of time lag. So, we collect the taxes, say, in a particular period, it actually refers to the economic activity several months back in a previous period. That is why I mentioned that the collection, there is a certain momentum that we are seeing even in the current financial year arising from the stronger economic performance and recovery post-COVID-19 pandemic. But whether this can continue, this is something that we need to watch very carefully because, as Mr Ang would be aware, there are some dark clouds in the global economy and the economic outlook for this year is unlikely to be as strong as, say, last year. So, these are things which we have to monitor carefully.

But, nevertheless, the point that I made in my main reply that we understand that there are cost of living concerns because that remains a concern for many Singaporean families and the Government will look at how we can provide more help. We will study whether there are ways to enhance the Assurance Package and, in particular, we have been providing not just vouchers but also cash components and many other types of assistance to Singaporeans within the Assurance Package and that is something that we will look at as well – how to channel the resources to provide the maximum impact.