- The Straits Times
With a generous annual budget announced on Monday (Feb 19), Singapore is expected to spend S$80.3 billion (US$59 billion) on healthcare for the elderly, supporting businesses and promoting technological advancement, among a slew of new fiscal measures.
The massive spending will result in a deficit of S$3.5 billion, which will be funded by previous budget surpluses, Finance Minister Heng Swee Kiat said in his Budget speech.
Business Insider rounded up five ways this year’s budget will affect working adults:
1. You’ll pay a higher GST in the coming years – but its impact will be “cushioned”
As he had announced in last year’s Budget, Minister Heng said that GST will be raised by two percentage points – to 9 per cent – at some point from 2021 to 2025.
But while raising the GST, the Government will ensure that the overall system of taxes and transfers “remains progressive and fair”, and will continue to absorb GST on publicly subsidised education and healthcare, Heng said, adding that it will enhance the permanent GST Voucher scheme for lower-income households and the elderly.
Furthermore, the Government will “cushion the impact of the GST increase for a period” through a GST offset package – which lower- and middle-income households will get more of.
Minister Heng also said that he will tighten the GST import relief for travellers, starting Tuesday (Feb 19).
For those who spend less than 48 hours outside of Singapore, the value of goods bought overseas will receive a reduction of GST relief – from $150 to $100. This means that a 7 per cent GST will be applied on items bought abroad that are worth above $100 for travellers who spent less than two days outside the country.
Meanwhile, travellers who spend 48 hours or more outside Singapore will receive a reduction of relief quantum – from $600 to $500.
From Apr 1, the alcohol duty-free allowance will also be reduced, from three litres to two litres.
2. You’re getting S&CC rebates for another year
The Government will also provide another year of Service and Conservancy Charges (S&CC) rebates to HDB households, said Minister Heng.
Eligible Singapore households will receive these rebates of between one and a half, and three and a half months – depending on their HDB flat types.
According to a table of 2019 S&CC Rebate provided on the Budget website, one- and two-room flats will get 3.5 months of rebates, three- and four-room flats will get 2.5 months of rebates, five-room flats will get 2 months of rebates while executive or multi-generation flats will get 1.5 months of rebates.
Looking at the current reduced S&CC rates of the Ang Mo Kio Town Council – which are similar to those of the Holland-Bukit Panjang and East Coast-Fengshan Town Councils – this year’s S&CC rebates would help households living in one-room flats save approximately $73.50 in total, two-room flats would save $108.50, three-room flats would save $118.75, four-room flats would save $157.50, five-room flats would save $156, while executive apartments or maisonettes would save $150.
In total, the rebates will benefit 930,000 households and will cost $132 million, said the minister.
3. Household utility bills may go up slightly with the introduction of carbon tax
The minister also elaborated on a carbon tax that will be levied on all emissions in Singapore to tackle climate change and send “an important signal” to Singaporeans to save energy.
The same carbon tax rate will apply to both households and businesses in order to “maintain a transparent, fair and consistent carbon price across the economy,” Minister Heng had said in his Budget speech last year.
The tax is S$5 per tonne of greenhouse gas emissions from 2019 to 2023, and will mainly affect major emitters, who account for “about 80 per cent” of Singapore’s emissions, the minster said.
The Government said it will review the tax in 2023, and hopes to raise it to between S$10 and S$15 per tonne of emissions by 2030.
At the present S$5 rate, household electricity and gas bills are expected to rise by about one per cent, Minister Heng said.
The Government will also provide utilities rebates, in the form of a GST Voucher, to help those living in HDBs offset the increased price for three years.
4. You could end up paying S$200 less income tax this year
Minister Heng said the Ministry of Finance was providing a 50 per cent personal income tax rebate – capped at $200 – for income earned in 2018. This means working adults could end up paying just half of their usual personal income tax amount.
The minister said this is so the benefits “go mostly to middle-income earners”. This is estimated to cost about $280 million.
Parents with school-going children will be given relief with a one-time $150 top-up to their Edusave accounts, applicable to all Singaporean students aged seven to 16.
5. You could get up to $300 in GST Voucher cash payouts
Since Singapore is marking its bicentennial year, the Government is giving out a “bicentennial bonus’ worth $1.1 billion.
Around 1.4 million Singaporeans above 21 years old – with annual incomes less than S$28,000 – will get up to S$300 in GST Voucher cash payouts from the Government, depending on the value of their home.
The bonus is meant to help lower-income Singaporeans with daily living expenses, the minister said.
Around 407,000 lower income workers who received Workfare Income Supplement (WIS) payments will also get a Workfare Bicentennial Bonus in cash. This is an additional 10 per cent of their WIS payment for work done in 2018, with a minimum payment of S$100.
To encourage giving back, a $200 million Bicentennial Community Fund will provide dollar-to-dollar matching for donations garnered by Institutions of a Public Character (IPCs) this year. Donations made to IPCs qualify for a 250 per cent tax deduction, the Finance Minister added.
Additionally, employers are encouraged to get their staff involved in volunteerism with a 250 per cent tax deduction on qualifying expenditure for businesses when the employees volunteer or provide services to IPCs, under the Business and IPC Parternship Scheme.