Singapore Finance Minister Heng Swee Keat released Singapore Budget 2018 on Monday on the basis: Building a Sustainable Foundation.
- Finance Minister Heng Swee Keat in his Monday Budget speech clarified that widely-expected increase in the Goods and Services Tax (GST) will not take effect this year, but Budget 2018 laid the foundations for a hike two percentage points, from 7% to 9%sometime between 2021 and 2025.
- The SG Bonus will cost S$700 million that will be paid out to 2.7 million recipients by the end of this year. The one-time bonus will be set as S$300, S$200 or S$100 – depending on income – for all Singaporeans aged 21 and above.
- Singapore’s carbon tax will start at S$5 a tonne for five years from 2019, and, following a review in 2023, eventually be raised to between S$10 and S$15 a tonne by 2030, said Finance Minister Heng Swee Keat. The tax will bring in nearly S$1 billion in revenue in the first five years, this is to help companies improve energy efficiency and reduce emissions.
- There will be a 1-percentage point hike in the top marginal buyer’s stamp duty (BSD) rate on the portion of a residential property’s value exceeding S$1million. These include expensive condo units, bungalows and what is happening more rampantly nowadays – land and en bloc property purchases by developers.
- The Wage Credit Scheme (WCS) will be extended for an additional three years till 2020, but with gradually reduced. It will provide 20% co-funding for 2018, 15% for 2019, and 10% for 2020. The scheme, which aims to encourage employers to share productivity gains with staff, will be about S$1.8 billion over the next three years.
- The corporate income tax (CIT) rebate for the Year of Assessment 2018 will be raised to 40% of tax payable, capped at S$15,000. Currently, companies can qualify for CIT rebate of 20% of tax payable, capped at S$10,000 for YA 2018. CIT rebate will also be extended to YA 2019, at a rate of 20% of tax payable, capped at S$10,000.
- An Infrastructure Office will be set up by Enterprise Singapore (ESG) and the Monetary Authority of Singapore this year to tap into infrastructure opportunities in Asia, such as those created by China’s Belt and Road Initiative. It is deemed to provide a platform for information exchange and facilitate infrastructure investments and financing.
- The enhanced Proximity Housing Grant (PHG) scheme as follows:
- Singles who buy a resale HDB flat to live with parents will receive S$15,000
- Singles who buy a resale HDB flat to live near parents will receive S$10,000
- Families who buy a resale HDB flat to live with parents of children will receive S$30,000
- The definition of “near” under the Proximity Housing Grant is extended to “within 4km”
- There is a budget deficit of S$0.6 billion, or 0.1% of GDP, expected for FY18 while expenditure is also expected to rise. Total spending by the ministries should round to S$80 billion in FY18, or 8.3% more year on year, mainly on the back of increased spending in transport, trade and industry and domestic security.
- There will be an integration of health and social services for seniors, and S$550 million will be spent to better serve the needs of ageing Singaporeans. There will also be a sum of S$550 million set aside to top-ups for supporting senior Singaporeans, additional S$200 million yearly for education schemes.
- There will be a sum S$190m to be allocated yearly to encourage philanthropy and voluntarism. A 250% tax cut for donations to Institutions of a Public Character (IPC), the one-stop platform to better match donors and volunteers with charities, for three years and extending the Business and IPC Partnership Scheme (BIPS) for three years.
- From 1 April 2019, the monthly levy for foreign maids will rise from S$265 to S$300 for the first maid hired and to S$450 for the second. The qualifying age for the Foreign Domestic Worker (FDW) levy concession under the aged person scheme will also increase from 65 to 67 years. Those who are enjoying or have enjoyed the levy concession under the aged person scheme before April 1, 2019, will continue to pay the monthly levy rate of S$60.
