Many Singaporeans would have been looking forward to today when Singapore Government would announce the Singapore’s 2015 budget. The budget is expected to be very favourable, since Singapore is celebrating SG50 or 50 years of Independence this year, and also because the next General Election is coming soon (must be held latest by January 2017).
With the announcement
of such a big “Ang Bao” budget for 2015, I am speculating that the coming
Singapore General Election is mostly likely going to be held before next
Singapore Budget date, i.e. before end of February 2016! Let’s see whether I get my prediction
correct!
If you have no time to
read the details, you can also read the key summaries at this URL…
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Singapore
Budget 2015: Key initiatives announced
Monday,
Feb 23, 2015
AsiaOne
Enhancements
and changes were announced in the Budget 2015 on Monday. Finance Minister and
Deputy Prime Minister Tharman Shanmugaratnam said the Budget was focused on
building Singapore's future and strengthening social security. The Budget 2015
also paid attention to investing in innovation and internationalisation of
SMEs, as well as providing more assurance for retirement.
Here
are the key changes announced by DPM Tharman today:
1)
SkillsFuture
Mr
Tharman said: "Through SkillsFuture, we will help Singaporeans learn at
every age, and develop expertise and flair in every field. We will develop a
whole array of learning options for individuals to choose as they shape their
journey through life. We will support this through higher subsidies and a range
of awards and fellowships for those pursuing mastery in their fields".
Singaporeans
25 years old and above will receive an initial SkillsFuture Credit credit of
$500 from 2016. The Government will provide further top-ups at regular
intervals. These credits will not expire, but can only be used for education
and training.
2)
Foreign Domestic Worker Levy Concession
The
foreign domestic worker concessionary levy will be reduced from $120 per month
to $60 per month. The concessionary levy will also be extended to households
with children aged below 16, up from below 12 today. These changes will provide
greater support for middle-income families who are taking care of their
children and elderly parents.
The
reduction will take effect from 1 May 2015, and will benefit 144,500
households. This will cost about $125 million per year.
The
annual savings from the reduced levy amount to $720 a year.
The
savings will be much larger than the rise in petrol duties if the same family
also drives a car, Mr Tharman added.
3)
Enhancing CPF Savings
a)
Higher CPF Salary Ceiling and Supplementary Retirement Scheme Contribution Cap
The
income ceiling for CPF contributions will be raised from $5,000 to $6,000 from
2016.The increase will benefit at least 544,000 CPF members. The contribution
cap within the Supplementary Retirement Scheme (SRS) will also be raised.
b)
Raising CPF Contribution Rates for Older Workers
Contribution
rates for workers aged 50 to 55 will be restored to the same level as those for
younger workers. he contribution rate for these workers will go up by 2
percentage points in 2016 -- 1 percentage point from the employer, and 1
percentage point from the employee.
For
workers aged 55 to 60, the contribution rate will be increased by 1 percentage
point from employers.
For
workers aged 60 to 65, the contribution rate will go up by 0.5 percentage
points from employers.
c)
Enhancing Progressivity through Extra CPF Interest
From
2016, an additional 1 per cent interest will be applied to the first $30,000 of
CPF savings for those aged 55 and above. This is on top of the existing 1 per
cent extra interest on the first $60,000 of savings. Given the 4 per cent
interest rate on Retirement Account balances, members with lower balances can
earn 6 per cent interest.
4)
Silver Support Scheme
The
bottom 20 per cent of Singaporeans aged 65 and above will get receive a
supplement between $300 and $750 every quarter. The average recipient will get
$600. Silver Support recipients who live in smaller flats will receive more.
All the seniors who qualify for Silver Support will receive these supplements
for life, as long as they remain eligible. Silver Support is estimated to cost
about $350 million in the first full year
5)
GSTV - Seniors' Bonus in 2015
Before
the Silver Support Scheme comes into effect in 2016, senior citizens above 65
years old will recieve a one-off Seniors' Bonus. This will effectively double
the GSTV - Cash that they usually receive. They will therefore get up to $600.
Furthermore, those aged 65 and above and living in HDB flats will get an
additional $300 this year. They will therefore get a total of $900.
6)
Enhancements to GST Voucher scheme
To
help lower-income households, about 1.4 million Singaporeans will get $50 more
in GST Vouchers from this year. This means that eligible individuals will
receive up to $300 in cash.
7)
Personal Income Tax Rebate
To
help middle-income tax payers, there will be a one-off tax rebate of 50 per
cent, capped at $1,000. This is for the year of assessment 2015 for income
earned in 2014. This will help 1.5 million taxpayers and will cost the
Government $717 million.
8)
Waive Exam Fees for Singaporean Students
Singaporeans
in Government-funded schools sitting for the Primary School Leaving Examination
(PSLE), and GCE N, 0, and A levels exams will not need to pay examination fees
from 2015.
9)
Enhance Affordable, Quality Child Care
The
Government has introduced a new Partner Operator (POP) scheme to complement the
Anchor Operator scheme. Child care operators on the scheme will have to commit
to keeping fees affordable, developing their teachers, and enhancing quality.
In
addition, the Government will help families pay for pre-school fees through a
top-up to the Child Development Accounts (CDAs) of every Singaporean child aged
six and below in 2015.
The
majority of children will receive $600. For a middle-income household, the
top-up of $600 is sufficient to cover more than a month of child care costs
after subsidies.
The
top-up will cost $126 million and benefit 230,000 children.
10)
Petrol Duty and Road Tax Rebate
Mr
Tharman announced that petrol duty rates will be increased by $0.20 per litre,
and intermediate grade petrol by $0.15 per litre. These changes will take
effect today, and yield about $177 million a year.
To
ease the transition to the higher petrol duties, the Government will provide a
one-year road tax rebate of 20 per cent for cars, 60 per cent for motorcycles,
and 100 per cent for the small number of commercial vehicles using petrol. The
road tax rebate will offset about two-thirds of the impact of the petrol duty
change on intermediate grade petrol for a typical car. The one-year road tax
rebate will cost Government $144 million.
11)
More tax deductions for donations made
Donations
made in Jubilee year 2015 will be given 300 per cent tax deductions, up from
250 per cent.
12)
Wage Credit Scheme
The
Government will extend the Wage Credit Scheme for 2016 and 2017, to give
employers more time to adjust to the tight labour market.
Over
the next two years, the Government will co-fund 20 per cent of wage increases
given to Singaporean employees earning a gross monthly wage of $4,000 and
below. This will apply to wage increases given in 2016 and 2017.
13)
Corporate Income Tax (CIT) Rebate
As
firms continue to face cost pressures in this period of restructuring, the CIT
rebate for YA 2016 and 2017 will be extended at the same rate of 30 per cent of
tax payable, but up to a lower cap of $20,000 per YA.
14)
Support for Innovation and Internationalisation
There
are three new measures to help local companies go global.
This
includes increasing the support level for SMEs with activities under 1E
Singapore's grant schemes.
The
Double Tax Deduction for Internationalisation scheme will also be extended to
cover salaries incurred for Singaporeans posted overseas.
Thirdly,
a new International Growth Scheme (IGS) will provide allow qualifying companies
to enjoy a 10 per cent concessionary tax rate on their incremental income from
qualifying activities.
15)
High-income earners to pay more tax
The
top marginal rate will be increased by two percentage points, from 20 per cent
to 22 per cent for the highest income earners, with a chargeable income above
$320,000. Smaller adjustments will be made to raise income tax for the others
in the top 5 per cent.
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