Background and Rationale​​

The Goods and Services Tax (GST) is a tax on domestic consumption. The tax is paid when money is spent on goods or services, including imports. It is a tax on the value added at every stage of the production and distribution chain.​​​​

The GST Voucher – Cash helps to offset some immediate cash outlays. Eligible Singaporeans staying in HDB flats and lower-value private properties will receive the highest payout of $300.

The GST Voucher – MediSave will help most elderly Singaporeans with their medical expenses. They can receive up to $450 each year in their CPF MediSave Accounts, if they stay in HDB flats and lower-value private properties.

The GST Voucher – U-Save is a rebate that helps with your household’s utilities expenses.

On average, the overall GST Voucher scheme will help lower-income households offset about half of the GST they pay each year. Retiree couples living in smaller flats can expect to receive a GST Voucher that will more than fully offset their yearly GST expenses. Middle-income families can also expect to receive a GST Voucher that will partially offset their GST expenses.

The permanent GST Voucher scheme was introduced by the Government in Budget 2012 to help lower-income Singaporeans. It is made up of three components;​ GST Voucher​ – Cash​, MediSave​ and U-Save​​.

In 2020, about 1.4 million Singaporeans were eligible to receive up to $300 in GST Voucher – Cash. In addition, about 545,000 elderly Singaporeans were eligible to receive the GST Voucher – MediSave of up to $450, while about 940,000 households received utilities rebates of up to $380 from the GST Voucher – U-Save.

Exempting or introducing reduced GST rates on certain items, such as rice and eggs, from GST, will benefit the better-off more as they spend more.

The experience of many countries and relevant studies also show that a multi-rate GST system distorts consumption and production, and raises businesses' compliance and administrative costs significantly, which are then passed on to consumers who eventually pay higher prices.

​The GST should not be seen on its own. Under Singapore’s approach, GST works hand-in-hand with the permanent GST Voucher scheme and other social schemes. From education to healthcare to housing, our social programmes provide a higher level of support for lower- and middle-income households. For example, they benefit from higher healthcare and pre-school subsidies. There are also schemes like Workfare and Silver Support to help lower-income households.

We will continue to ensure that this overall system of taxes and transfers is fair and progressive, i.e. those who are better-off are taxed more than what they receive in transfers, while lower- and middle-income households receive more in transfers than what they pay in taxes. The GST Voucher is given directly to those in need, lowering their net GST payable.

The GST Voucher is meant to support living expenses for both immediate and longer-term needs. It consists of three components – Cash, MediSave and U-Save​.

The GST Voucher is a permanent scheme with benefits given out yearly. The scheme aims to provide more support to lower- and middle-income Singaporean households, as part of our overall system of taxes and transfers. It cost the Government about $830 million in FY2020.

In 2012, the Government established a GST Voucher Fund to make payments under the scheme to eligible Singaporeans. The Fund provides certainty of payments regardless of the prevailing economic circumstances. If necessary, the Government can make further injections into the Fund to carry on financing this permanent GST Voucher scheme.