Despite having a relatively stable growth rate over a long period of time, Singapore and many other countries are currently suffering from the global economic recession and the effects of the Covid-19 pandemic. Meanwhile, the budget for spending on people's health care, dealing with climate change, transportation costs and other social support services is increasing. GST tax is the main and sustainable source of revenue to serve the above public services and social support. From 2022, Singapore's Ministry of Finance has announced a roadmap to increase GST after 15 years of keeping this tax rate unchanged at 7% (since 2007). Accordingly, Singapore's GST tax has increased from 7% to 8% on January 1, 2023 and will continue to increase to 9% on January 1, 2024. Recently, Singapore's Inland Revenue Authority also issued Guidelines for businesses subject to GST in 2024 and announced an increase in Singapore's GST tax to 9% starting from January 1, 2024. 2024.

According to experts, Singapore's increase in GST to 9% may affect a number of areas in Singapore business and market such as:

• Decline in consumer spending: An increase in GST will lead to an increase in the general price of products and services in the market, causing a negative impact on consumer spending, especially for commodities. luxury. It can be predicted that people will consider spending less or look for products with more affordable prices and moderate quality.

• Inflation increased. However, according to the Singapore Government's calculations, inflation will be controlled with the current roadmap of increasing GST in stages.
• Increasing cost pressure on Singapore's small and medium enterprises: The increase in GST will have a deeper impact on the profits of small and medium enterprises. Businesses in this group are facing increasing costs for workforce, logistics and energy, negatively affecting business operations as they are forced to increase the selling price of their goods and services. Or look for other sources of supply and partners to have lower input prices and ensure business.

In the face of rising costs for production, consumption and living, it can be predicted that the consumption trends of the majority of Singaporeans will tighten in the near future and that of businesses in this country, in the long run. , will step up the search for suppliers with more affordable prices. Vietnam will be one of the suppliers that Singapore businesses are very interested in, learn about and wish to cooperate in the long term.

The Vietnam Trade Office in Singapore requested the Asia-Africa Market Department (Ministry of Industry and Trade) and relevant agencies to promote promotion, display and increase the presence of Vietnamese products in Singapore. Singapore market. At the same time, create conditions for organizing trade delegations and working directly between businesses of the two countries to further promote trade connection, trade promotion, industrial and service investment. Thereby contributing to increasing import-export turnover of Vietnam and Singapore./.

Source: Vietnam Trade Office in Singapore