EY is proposing to adopt sugar tax and to reduce tax for medical-related insurance policies in Singapore, according to EY’s wish list for Singapore Budget 2019 that was released today.
The two and other proposed measures seek to help shape a fiscally sustainable and secure future for Singapore by focusing on building a caring society and broadening the tax base among other goals, EY said.
One proposal is to provide tax deduction for medical-related insurance policies for individuals. Currently, there is no standalone tax relief available for premiums paid on medical-related or health insurance policies.
Mr. Panneer Selvam, Partner, People Advisory Services, Ernst & Young Solutions LLP says: “Allowing a tax deduction that is not tied to CPF contributions, subject to a cap of say S$5,000 for premiums paid for medical-related insurance paid by individuals for themselves or their family will encourage taxpayers to be more responsible for their health and wellbeing.”
He said enabling a tax deduction for health insurance premiums will encourage more taxpayers to take up health insurance policies, and also offer them greater access to health care. A tax relief for medical costs incurred by those over 50 years old for health screening every other year may also be considered to encourage preventive care.
In another proposal, EY is calling to introduce sugar tax asSingapore has the second-highest proportion of people with diabetes among developed nations according to a report by International Diabetes Federation in 2015
EY officials believe it may now be timely to introduce sugar tax to influence the short- and long-term buying behaviours of consumers. It also allows the government to deploy the additional tax revenue collected to subsidise health care costs and support healthier lifestyles. This may also drive businesses to innovate and develop new products, and enable them to enjoy R&D enhanced deduction.
Besides tax-related proposals, EY is also proposing the government to further facilitate local companies’ acquisition and to Provide clarity on GST treatment of virtual currencies among others.
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