Singapore budget: No sugar tax announced, but 2% GST hike planned

By Gary Scattergood and Cheryl Marie Tay

- Last updated on GMT

GST in Singapore will increas from 7% to 9%. ©GettyImages
GST in Singapore will increas from 7% to 9%. ©GettyImages

Related tags: Food, Nutrition, Singapore

The Singapore government made no mention of a sugar tax in its 2018 budget, despite food and beverage industry concerns that it could have been set to follow several other nations in introducing the levy.

However, Minister for Finance Heng Swee Keat announced a “progressive” ​increase in GST from the current 7% to 9% between 2021 and 2025, which will see the cost of food, beverages and supplements rise.

There had been rumours that Singapore could have been set to follow nations such as the Philippines, Sri Lanka and Brunei and introduce a tax on sugar-sweetened beverages and other products.

In the absence of any mention by Heng, the industry will now be waiting for individual ministries to publish their own budgets over the next few weeks to ensure it is not included in those.

Steven Bartholomeusz, director of policy at trade organisation Food Industry Asia, said a collaborative approach between manufacturers and the government around sugar reduction and reformulation appeared to be working well.

“I think we have seen that collaboration and partnership has been successful,”​ he said.

“Last year we saw seven of the largest beverage companies pledge to reduce their sugar levels,”​ he added, noting that the Health Promotion Board was now looking at introducing guidelines​ for manufacturers to reduce sugar in foods too.

Healthy ageing

The budget also focused heavily on the economic impact of Singapore’s ageing population.

Heng stated that healthcare spending was expected to overtake expenditure on education, rising from S$3.9bn to S$10.2bn between 2011 and 2018.

UOB economist Francis Tan told us this could boost the fortunes of health food and supplement firms.

“Demand will balloon,” ​he said.” The government has already pre-empted citizens to be prepared to take preventative measures, especially since PM Lee’s National Day Rally speech last year, where he emphasised the importance of fighting diabetes.

“The rise in the number of chronic disease cases in Singapore will also mean a big push for the health food and supplement industry, where manufacturers will be motivated to provide preventative solutions.”

The government also announced lower taxes (14.3%) for start-ups.

Our Healthy Ageing APAC Summit, taking pace in Singapore in June, will assess how the food and nutrition industries can meet the need of the region’s rapidly ageing populations of today and tomorrow. Find out more here.

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