Everything You Need to Know About Budget 2018 in 60 Sec

The Budget 2018 speech was delivered yesterday (Feb 19) by Finance Minister Heng Swee Keat at the Parliament.

Here are the main takeaways so you don’t have to watch the whole thing:

1. GST increase by 2%

The goods and services tax (GST) will be increased from 7% to 9%.

This will take place sometime from 2021 to 2025.

To help lower-income households handle the increase, the permanent GST Voucher scheme will be topped up by $2 billion.

GST on publicly subsidised education and healthcare will also continue to be absorbed.

You can read more about it here.

2.Help for households

As mentioned above, the permanent GST Voucher scheme will be enhanced with a S$2 billion top-up to the fund.

There’s also going to be an increase in Proximity Housing Grants for families and singles, and the extension of the service and conservancy charges rebate for an additional year.

3.E-services GST

From 1 Jan 2020, digital services from overseas suppliers will be taxed.

They do not need to have a physical presence locally to be taxed.

The GST will also cover imported services for businesses in Singapore, such as marketing, accounting, IT and management services.

This change will not affect e-commerce for goods (e.g. clothes, etc).

4.Buyer’s stamp duty rates for residential properties to increase

Top marginal Buyer’s Stamp Duty (BSD) will increase from 3% to 4%.

This will apply to the part of residential property value which is in excess of $1 million. The amendment will apply to all residential properties acquired from today (Feb 20).

Rates for non-residential properties remain unchanged at 1% to 3%.

5.Tobacco excise duty to increase by 10%

Tobacco excise duty will increase by 10%.

The Government is hoping to discourage consumption of tobacco products.

This has already taken effect since Monday (Feb 19).

You can read more about it here.

6.Extended measures to help business with costs

The Wage Credit Scheme will be extended for another three years.

More than S$800 million will be paid out to more than 90,000 firms in FY2017. Rebates under the Corporate Income Tax scheme will also increase from 20% to 40% in 2018.

The cap will be raised from S$10,000 to S$15,000.

The scheme will also be extended to 2019, where firms will receive 20% rebate capped at $10,000.

7.Foreign worker levy increase to be deferred

The increases in foreign worker levy rates which was announced earlier will be deferred (i.e. not to be implemented yet).

This only applies to the marine shipyard and process sectors, which still “face weakness”.

The rate will remain the same for all other sectors.

8.Measures to promote innovation

To help companies adopt the off-the-shelf technology and other productivity solutions, the Government introduced a productivity solutions grant.

There will also be a further tax deduction on licensing payments for the commercial use of intellectual property.

9.Carbon tax to be introduced

All facilities that produce 25,000 tonnes or more in greenhouse gas emissions annually will be taxed based on their total emissions.

The tax will be S$5 per tonne of greenhouse gas emissions from 2019 to 2023, after which the tax rate will be revisited.

The Government wants to increase to between S$10 and S$15 per tonne of emissions by 2030.

Households will receive additional S$20 under the Utilities-Save GST Voucher for three years to help reduce the burden.

10.Save and borrow for infrastructure expenditure

The Government is aiming to save ahead for costly infrastructure investments (e.g. Terminal 5).

It is also considering borrowing by statutory boards and government-owned companies that build infrastructure, to help share the cost of larger investments over a longer period of time.

11.Hongbao from FY2017’s budget surplus

All Singaporeans aged 21 and above will receive a “hongbao” of up to S$300 this year, depending on their annual income.

The S$700 million bonus comes from this year’s budget surplus of S$9.6 billion.

You can read more about it here.

12.Expected slight budget deficit in FY2018

Total Government expenditures are expected to increase by 8.3% in FY2018, at S$80 billion.

It is expected that there will be a “slight overall budget deficit” of S$0.6 billion, which constitutes 0.1% of the Republic’s GDP.

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This article was first published on goodyfeed.com

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Featured Image: Straits Times