19/02/2018
40 things you should know about Singapore Budget 2018
1. Singapore’s GDP grew 3.6%, up from 2.4% in 2016.
2. Singapore must be prepared for 3 major shifts in the coming decade:-
i) First shift is the rise of Asia
ii) The second shift is the emergence of new technologies such as robotics and digital technologies
iii) The third shift is ageing. Mr Heng says that there will be a significant increase in healthcare and social expenditure, placing greater demands on families and the Government.
3. Budget 2018 will focus on 4 areas:
i) developing a more vibrant and innovative economy
ii) building a smart, green and liveable city
iii) fostering a caring and cohesive society
iv) planning ahead for a fiscally sustainable and secure future
Area 1: developing a more vibrant and innovative economy
4. It will extend the Wage Credit Scheme (WCS).
i) The WCS will be extended for 3 more years. The WCS will provide 20% co-funding for 2018, 15% for 2019 and 10% for 2020.
5. The Corporate Income Tax (CIT) rebate will be enhanced and extended.
i) For Year of Assessment (YA) 2018, the CIT rebate will be raised to 40% of tax payable, capped at $15,000.
ii) The CIT rebate will be extended to YA2019, at a rate of 20% of tax payable, capped at $10,000.
6. Upgrading the current Work Trial scheme into a Career Trial programme, with higher funding support for workers to try out new careers.
7. The Government will anchor Singapore as a Global-Asia node of technology, innovation and enterprise by strengthening 3 enablers:-
i) Foster pervasive innovation throughout the economy,
ii) Build deep capabilities in Singapore’s firms and people, and
iii) Forge strong partnerships both locally and abroad.
8. Existing grants to support adoption of off-the-shelf technologies will be streamlined into a single Productivity Solutions Grant or PSG.
i) It will streamline existing grants supporting the adoption of pre-scoped, off-the shelf technologies into a single Productivity Solutions Grant (PSG)
ii) There will be up to 70 per cent funding support for companies to adopt productivity-enhancing tech or solutions.
9. An Open Innovation Platform will be piloted by IMDA - a virtual crowd-sourcing platform where companies can list specific challenges that can be addressed by digital solutions.
10. Aviation and Maritime Transformation Programmes to be launched this year to strengthen Singapore's status as air and sea hub. The Government will fund up to S$500 million for the two programmes.
11. Mr Heng says he will make adjustments to two broad-based tax schemes - the Start-up Tax Exemption and the Partial Tax Exemption.
i) First, he will restrict the tax exemptions under both schemes to the first $200,000 of chargeable income.
ii) Second, for start-ups, he will exempt 75%, instead of 100% currently, of their first $100,000 of chargeable income from corporate tax.
12. The Government will expand TeSA into new sectors like manufacturing and professional services, where digital technologies are increasingly important.
i) The Government will set aside an additional $145 million for TeSA over the next three years.
13. New ASEAN Leadership Programme under the SkillsFuture Leadership Development Initiative, to help business leaders build networks and plan business expansions in South-east Asian markets.
14. SINGAPORE will raise its re-employment age to 67 from 65 with effect from July 1, 2017
15. Government to set up a new Infrastructure Office, bringing together local and international firms for infrastructure projects, to tap on opportunities in Asia
Area 2: building a smart, green and liveable city
16. Government will set around $250m dollar for Energy Grid 2.0 to quickly and reliably respond to energy demand and supply
17. Carbon tax will be imposed on all facilities producing 25,000 tonnes or more of greenhouse gas emissions in a year.
i) First payment made in 2020, based on 2019 emissions
ii) Tax will be $5 per tonne, from 2019 to 2023
iii) Tax to be reviewed by 2023, with the intention to increase it to a rate of between $10 and $15 per tonne by 2030
iv) The tax will apply uniformly to all sectors, without exemption.
18. For households, the Minister says the carbon tax's impact be small - about 1% of total electricity and gas expenses on average.
i) To help them adjust, an additional U-Save rebate will be given for three years, from 2019 to 2021. Eligible HDB households will each receive $20 more annually.
Area 3: fostering a caring and cohesive society
19. Annual Edusave contributions, with effect from January 2019, will be increased from $200 to $300 for each primary school student, and from $240 to $290 for each secondary school student
20. There will be greater support for financial planning with the pilot of a new financial education curriculum at polytechnics and ITE, according to Mr Heng.
21. For the insurance scheme ElderShield, premium subsidies will be provided for lower and middle-income Singaporeans
22. Proximity Housing Grant for families buying a resale flat to live with their parents to increase to S$30,000; this also extends to singles, who will get S$15,000.
23. The Minister announces the extension of the Service and Conservancy Charges (S&CC) rebates by another year.
24. Foreign domestic worker levy to rise. The levy will be raised from S$265 to S$300 for the first worker and to S$450 for the second worker. To take effect from Apr 1, 2019.
25. To support the CNS expansion, the Pioneer Generation Office will be merged with AIC and renamed the Silver Generation Office.
26. Budget 2018 will also see the topping-up of two funds that support seniors to age confidently - the Community Silver Trust (CST) and Seniors' Mobility and Enabling Fund (SMF).
a. The CST will get a $300 million top-up
27. Over the next 5 years, the role and capabilities of Social Service Offices (SSOs) will be strengthened to better coordinate the efforts of Government agencies, VWOs and community partners.
28. Budget will extend the 250% tax deduction for donations made to Institutions of Public Character for another 3 years, until Dec 31, 2021.
Area 4: planning ahead for a fiscally sustainable and secure future
29. Within the next 5 years, six more general and community hospitals, four new polyclinics and more nursing homes and eldercare centres will need to be built.
30. Infrastructure spending increased from $8.5 billion in FY2011 to an estimated $20 billion in FY2018.
31. Next, Mr Heng identifies the need to invest more in security to keep Singapore safe, in the face of the threat of terrorism.
32. In last year's Budget, Mr Heng announced a permanent 2% downward adjustment to the budget caps of Ministries and Organs of State.
i) This year, the Budget will further moderate the pace of Ministries' budget growth.
ii) Their block budgets are currently allowed to grow at 0.4 times of GDP growth. This will be reduced to a rate of 0.3 times from FY2019.
33. Government will set up a new Rail Infrastructure Fund (with an injection of $5 billion) to save up for all major rail lines ahead
34. GST to be raised by 2 percentage points to 9% sometime in the period from 2021 to 2025.
35. The GST increase will be implemented in a progressive manner
36. Government will introduce GST on imported services with effect from Jan 1, 2020.
37. For FY2017, the Government expects an overall budget surplus of $9.6 billion or 2.1% of GDP. This is higher than the $1.9 billion or 0.4% of GDP forecasted a year ago
38. All Singaporeans aged 21 and above in 2018 will enjoy a "hongbao" of $300, $200 or $100, depending on their income.
39. Government will implement a 10% increase in to***co excise duty with effect from today
40. Buyers' stamp duty will go up from 3% to 4% with effect from tomorrow on residential properties with a value of more than $1 million
