SINGAPORE - The goods and services tax (GST) rate will increase from 7 to 9 per cent in two stages - one percentage point each time on Jan 1, 2023 and Jan 1, 2024.

The $6 billion Assurance Package earlier announced in 2020 to cushion the impact of the GST hike will also receive a boost of $640 million, totalling $6.6 billion, said Finance Minister Lawrence Wong on Friday (Feb 18) in his maiden Budget speech.

Where the timing of GST is concerned, Mr Wong said he had carefully considered the overall situation - the ongoing pandemic, the state of the economy and the outlook for inflation.

"Our revenue needs are pressing. But I also understand the concerns that Singaporeans have about the GST increase taking place at the same time as rising prices," he said.

That is why the GST increase will be delayed to 2023 and the hike will be staggered over two steps - first, from 7 per cent to 8 per cent on Jan 1, 2023; followed by 8 per cent to 9 per cent on Jan 1, 2024.

"I want to assure all Singaporeans that we will continue to implement the GST in our unique Singaporean way, with features and schemes that support the less well-off," he added.