GST Rate to increase to 9% on 1 January 2024
Last updated on 3 October 2023
The Goods and Services Tax (GST) rate will increase from 8% to 9% from 1 January 2024. The change is part of a 2-stage increase from 7% to 9% GST announced in Budget 2022. IRAS has advised businesses to prepare for the rate change early.
Most businesses would already be familiar with the requirement for the increase, having gone through an earlier round when the GST rate changed from 7% to 8% on 1 January 2023.
The following are selected common scenarios for businesses to prepare for the upcoming rate hike.
The above examples are not exhaustive of the scenarios that may arise. Companies should prepare early for the changes where possible, as penalties for non-compliance may be higher due to the higher GST rate. In addition, errors during submission for GST filings will be costlier as penalties are generally imposed based on the value of tax underpaid or over-claimed.
Customers should be informed of the rate change ahead of the change. All invoices and quotations issued should also reflect the correct GST rate. Businesses not ready for the rate change should engage accounting firms providing GST and accounting services in Singapore to ensure compliance come 1 January 2024.