SINGAPORE: Prime Minister Lee Hsien Loong's comments on Sunday (Nov 19) that raising taxes is not a matter of whether, but when, is "in line" with what Deputy Prime Minister Tharman Shanmugaratnam had said in 2015 on the adequacy of revenue, the Ministry of Finance (MOF) said on Tuesday.
The ministry's statement came after Mr Lee's comments on the impending tax hike triggered public discussion that the Government is making a U-turn.
In his capacity as Finance Minister in 2015, Mr Tharman said that the revenue measures the Government had already undertaken would provide sufficiently for increased spending planned until the end of the decade.
"This is in line with Prime Minister Lee's speech at the PAP convention on Nov 19, 2017, where PM Lee said, 'For this current term of Government, we have enough revenue'," said MOF.
However MOF added that, as Mr Lee explained in his speech, government spending has been increasing. Planning for the issue now will allow the ministry to "better ease in the needed measures, and to give our people and businesses some time to adjust".
"Any decision to raise taxes will not be taken lightly. But necessary investments in the future are needed," MOF said.
"The Government has to remain forward-looking, planning beyond this decade, and will study all options carefully, doing it with least impact on the less well-off and on Singapore’s economy," it added.
In his Budget speech in February, Finance Minister Heng Swee Keat highlighted that the Government's expenditure is expected to rise rapidly in the coming years, particularly in healthcare and infrastructure.
Mr Heng added that the Government will have to raise revenue through new taxes or increase tax rates, to ensure future generations can remain on sustainable fiscal footing.