A number of expansionary measures, as well as higher taxes on luxury cars and property, included in the latest Singapore budget
The Singaporean government has announced several economic measures aimed at supporting citizens and businesses through inflation, cost of living, and encouraging innovation. Announced by Deputy Prime Minister Lawrence Wong, these measures include increasing support for permanent GST voucher scheme recipients and extending assistance through the Assurance Package, increasing the monthly income ceiling for CPF contributions, supporting innovation, introducing measures to support parenthood, and better protection for platform workers.
The government will also increase taxes on luxury cars and tobacco while harmonizing support programs for lower-income families and expanding initiatives for children born into such families. Below are some of the key measures:
- The Singapore government will increase stamp duties for higher-value residential and non-residential properties, affecting those valued above S$1.5 million. The changes will impact approximately 15% of residential properties and 60% of non-residential properties.
- The government will provide additional financial support to individuals and firms to cope with inflation and the cost of living. Permanent GST voucher scheme recipients will receive more money this and next year. The government will also offer more assistance until 2027 through the Assurance Package, based on factors such as earnings, home value, and family size. Additionally, two schemes for firms – the Enhanced Enterprise Financing Scheme and the Energy Efficiency Grant – will be extended until March 31, 2024.
- The monthly income ceiling for CPF contributions will increase from S$6,000 to S$8,000 over four years starting in 2023, to keep pace with rising salaries. However, employers will face higher costs, and affected employees will need to set aside a larger sum.
- The Singaporean government is increasing its support for innovation. The National Productivity Fund will receive a large top-up to support productivity, education and training initiatives. A new Enterprise Innovation Scheme will provide tax allowances and deductions for research and development, intellectual property, training expenses, and projects with polytechnics and ITEs. Additionally, S$1 billion will be set aside to help local companies build capabilities and grow.
- The government will implement a Domestic Top-up Tax for large multinational enterprise groups based in Singapore starting in 2025, as part of rolling out Global Anti-Base Erosion rules. This will ensure the minimum effective tax rate for these companies is 15%.
- The government will introduce measures to support parenthood, including housing and cash incentives, Child Development Account top-ups, paternity leave, and the Working Mother’s Child Relief scheme. However, the foreign domestic worker levy tax relief will expire in 2025.
- Platform workers can expect better protection for their livelihoods, as the government plans to align CPF contributions with those of employers and employees over the next five years. A transition support scheme will offset platform workers’ increased CPF contributions in the first four years if they earn S$2,500 or less per month.
- The government will harmonize its support programs for lower-income families, top up the ComCare fund, and expand an initiative for children born to lower-income families. For seniors, schemes that encourage companies to offer part-time and flexi-work arrangements and retain those who wish to continue working will be extended until 2025.
- The government will increase taxes on luxury cars and tobacco. Tiered higher additional registration fees will be imposed on cars worth more than S$40,000. Additionally, the excise duty for tobacco products will increase by 15%.
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