It may also exceed 20% of the economy by 2030 fiscal year.
The government spending could rise to around 19% to 20% of gross domestic product in the fiscal year of 2026 to 2030 period, the Ministry of Finance (MOF) said.
These were some of the findings in MOF’s occasional paper which reviews fiscal implications of medium term challenges.
The numbers stemmed from healthcare expenditure, raising lower-wage workers’ lifestyle, and improving early childhood education.
MOF explained that their total revenue is composed of operating revenue and net investment returns contribution which is about 18.5% of the economy.
It will not be enough to cover the increase in government spending expected over the coming years, MOF said.
“That is why the tax changes announced in Budget 2022, including the Goods and Services Tax increase, were necessary to close the funding gap,” said MOF.