Singapore's Goods and Services Tax (GST) increased from 8% to 9% on 1 January 2024, completing the two-step hike from the original 7% rate. Now well into 2026, the dust has settled and the impact on both businesses and consumers is clear. For businesses, the higher rate means higher compliance costs and more complex pricing decisions. For consumers, it means higher prices on almost everything — partially offset by government assistance packages.
This guide explains what the 9% GST means in practice for businesses and households in 2026.
Impact on Businesses: Registration and Compliance
If your company's annual taxable turnover exceeds S$1 million, GST registration is mandatory. Once registered, you must charge 9% GST on all taxable supplies (goods and services), file GST returns quarterly (or monthly, for larger businesses), and maintain detailed records of all GST collected and claimed.
The 9% rate has made GST compliance more significant in absolute terms. On S$1 million of taxable revenue, the GST collected is S$90,000 — compared to S$70,000 at the old 7% rate. This is money you collect from customers and remit to IRAS, but the cash flow implications are real. You need to set aside GST collected and manage the timing between collection and remittance.
For businesses just above the S$1 million threshold, voluntary deregistration is not an option once you have exceeded the limit. However, if your turnover has fallen below S$1 million and is expected to stay there, you can apply to cancel your GST registration. Use our GST calculator to estimate your GST liability and cash flow impact.
Pricing Strategies: Absorb or Pass Through?
When GST increased from 8% to 9%, businesses faced a choice: absorb the additional 1% or pass it on to customers. Most businesses chose to pass through the increase — after all, GST is meant to be a tax on the end consumer. But the decision is not always straightforward.
In competitive consumer-facing markets — food and beverage, retail, and personal services — some businesses absorbed part or all of the increase to maintain price competitiveness. A hawker stall that charged $4.50 for a meal may have kept the price at $4.50 rather than increasing to $4.54, absorbing the difference from its margins.
For B2B businesses, the impact is neutral in most cases. Your GST-registered business customers can claim back the GST as input tax, so the price increase does not affect their bottom line. The 9% rate is most impactful for businesses selling to non-GST-registered customers — individuals and small businesses below the registration threshold.
Model your pricing decisions using our profit margin calculator to see how the GST rate affects your margins at different price points.
Impact on Consumers: What Costs More
At 9%, GST adds S$9 to every S$100 of goods and services. Over a year, for a typical Singapore household spending S$4,000 to S$6,000 per month on GST-liable items, the GST burden is approximately S$4,320 to S$6,480 per year — an increase of approximately S$480 to S$720 compared to the old 7% rate.
Categories where the GST impact is most felt include dining out and takeaway food, clothing and household goods, electronics and appliances, private transport (including car servicing and petrol), entertainment and recreation, and professional services (legal, accounting, medical consultations above the exemption).
Categories that are exempt from GST include residential property sales and rentals, most financial services, and the supply of digital payment tokens. Exported goods and international services are zero-rated (0% GST). Public transport remains GST-exempt.
Government Offsets: The Assurance Package
To cushion the impact of the GST increase, the Singapore government introduced the Assurance Package — a S$9.6 billion package of cash payouts, CDC vouchers, U-Save rebates, and MediSave top-ups rolled out over five years from 2023 to 2028.
In 2026, eligible Singaporeans continue to receive annual Assurance Package cash payouts of S$200 to S$400 (depending on income and property ownership), CDC vouchers of S$300 per household (usable at participating heartland shops and hawker centres), U-Save rebates of up to S$950 per year for HDB households (offsetting utility bills), and additional MediSave top-ups for older Singaporeans.
For lower- and middle-income households, the Assurance Package more than offsets the additional GST burden for the first several years. For higher-income households, the offsets are smaller and the net impact of the GST increase is more significant.
GST and Your Overall Tax Position
GST is an indirect tax — it is embedded in the prices you pay rather than deducted from your income. Unlike income tax and CPF, you cannot "optimise" your GST burden through reliefs or deductions. The only way to reduce GST costs is to spend less on GST-liable items or shift spending toward exempt categories.
However, GST should be considered as part of your overall tax position. Singapore's total tax burden — including income tax, CPF, and GST — remains competitive by international standards. A typical salaried worker earning S$80,000 pays approximately S$2,000 to S$3,000 in income tax, S$16,000 in CPF contributions (refundable as retirement savings), and S$3,500 to S$5,000 in GST. The combined rate is low compared to the UK, Australia, or Germany.
To understand your full tax picture, use our salary calculator for income tax and CPF, and our GST calculator for the indirect tax component. Together, they give you a complete view of how much of your income goes to the government — and how much you keep.