Several business owners said they have been feeling rising cost pressures in several aspects - manpower, logistics, raw materials and electricity.
While the economy is recovering from its worst during the height of the pandemic, revenue is still down between 30 and 40 per cent, he said. Traditionally reliant on workers from Malaysia, border restrictions have also made it very hard for him to employ workers, and hence manpower costs have been going up to attract them.
Mr Keson Lim, the director of toys distribution firm Being Kids, said that his business costs have jumped by 20 to 30 per cent. “Many businesses that were profitable in 2019, were unprofitable in 2021 due to cost increases.” He reiterated that he cannot adjust prices too much, as consumers are now more price sensitive than they were pre-pandemic, as some may have lost their jobs or suffered a drop in income.
“We did a marginal 10 per cent to reduce the negative impact on ourselves. It’s not even to be profitable,” he said. Plans to raise the GST from 7 to 9 per cent between 2021 and 2025 were first announced in 2018 by then Finance Minister Heng Swee Keat, who is now Deputy Prime Minister. The purpose is to raise the Government’s revenue due to an expected increase in recurrent spending, especially in healthcare, as Singapore grapples with an ageing population.
DBS senior economist Irvin Seah believes that the GST increase will be implemented in July and the Government will raise the tax by 2 percentage points in one go.
TOO BIG COMMON PROBREM in the world.
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