Feb 18 (Reuters) – Here are some excerpts from Singapore’s 2022 budget proposals announced by Finance Minister Lawrence Wong in parliament on Friday.
For a full story, see Read More
Join now for FREE unlimited access to Reuters.com
– “Some segments of the economy are still struggling. I will therefore provide targeted assistance to our workers and businesses in these sectors through a S$500 million Jobs and Business Support Program (372.61 millions of dollars).”
– “I recognize the immediate concerns of businesses and households and will provide significant additional support…this represents a significant package of S$560 million to help Singaporeans pay their utility bills, children’s education and basic necessities.”
EXPENSES AND INCOME
– “On the spending side, our needs are large and growing. By 2030, we expect public spending to increase to more than 20% of GDP. Most of this increase in spending will go to health.”
– “We will set aside S$6 billion to maintain a multi-level public health defense. This is necessary for us to respond with agility and confidence to the evolving COVID-19 situation.”
– “On the revenue side, we wouldn’t have enough to cover additional spending needs… That’s why we’ll be making significant improvements to our tax system in this budget.”
– “Taxes on wealth are therefore necessary to build a fairer society where everyone can aspire to succeed, whatever their origin… Ideally, we would like to tax the net wealth of individuals. But such a tax is not easy to implement.
– “I will increase the property tax rates or non-owner occupied residential properties which includes investment properties. For these properties, I will increase the property tax rates from 10-20%…to 12 to 36% of all non-owner-occupied residential properties.
– “When fully implemented, they will increase our property tax revenue by approximately $380 million per year.”
– “I will also tax luxury cars at a higher rate to make our vehicle taxation system more progressive. I will introduce an additional RFP (request for proposals) for cars at a rate of 220% for the part of open market value above $80,000.”
GOODS AND SERVICES TAX
“I also understand Singaporeans’ concern about increasing GST at the same time as rising prices. I have therefore decided to postpone the GST increase to 2023 and stagger the increase over two The first increase will take place on January 1, 2023, from 7 to 8%, and the second increase on January 1, 2024, from 8 to 9%.
CORPORATE AND INCOME TAXES
“I will therefore increase the top marginal personal income tax rate, or PIT rate, effective for the 2020 tax year. For the portion of taxable income over $500,000 up to $1 million will be taxed at 23%, while those over $1 million will be taxed at 24%, compared to 22% today.This increase is expected to affect the richest 1.2% of taxpayers and will generate 170 million dollars in additional tax revenue per year.
– “Our corporate tax system will need to be updated due to global tax developments.”
“This means that if such a multinational (multinational enterprise) were to have an effective tax rate of less than 15% in Singapore at the group level, other jurisdictions such as its home jurisdiction may levy the difference up to 15% %.”
“We will adjust our tax system in response… We are studying a complementary tax called the minimum effective tax rate, or METR. The METR will supplement the effective tax rate of the multinational group.
in Singapore at 15%.”
– “This budget will put in place the key changes we need to make to invest in new capabilities that we need to take to invest in new capabilities, advance our green transition, review and strengthen our social pact and develop a more streamlined structure and more resilient.”
– “We will also invest in future technologies such as 6G, to ride the next wave of communication and connectivity.”
– “Along with infrastructure improvements, I will set aside an additional S$200 million over the next few years to improve programs and build the digital capabilities of our businesses and workers.”
EMPLOYMENT AND SALARIES ABROAD
– “Let me emphasize that Singapore will continue to remain open and welcome talent from around the world. Adjustments to our foreign worker policies apply primarily to the broad workforce.”
– “We will be updating the framework for Employment Pass (EP) holders… Starting September of this year, the qualifying minimum wage for new EP candidates will increase from $4,500 current S$5,000. For the financial sector, which wage standards, this will increase from current S$5,000 to S$5,500.”
– “We will refine the way we assess EP applications to improve the complementarity and diversity of our overseas workforce and also to increase certainty and transparency for business.”
– “All of us, businesses, consumers and taxpayers, will need to do our part and help lift our lowest paid workers. I recognize that some businesses may need time to adjust… Others may struggle to raise prices in the short term to support wage increases.
– “I would therefore introduce the Progressive Wage Credit Scheme, or PWCS, to provide transitional support to businesses.”
– “Under the PWCS, the government will co-fund wage increases for the lowest paid workers between 2022 and 2026. For workers earning up to S$2,500, the PWCS co-funding rate will be 50% during of the first two years. next two years before dropping to 15% in 2026.”
– “We will spend an average of $1 billion per year over the next five years, or $9 billion in total on PWCS… This is a significant increase and reflects our shared commitment to uplifting our least workers well paid.”
– “We believe that we can advance our net zero emissions timetable. We will therefore raise our ambition to achieve net zero emissions by or around the middle of the century.”
– “The path to net zero will bring significant economic restructuring and changes to the way we live and work in the future. Everyone … will face tough choices. Costly investments may be required.”
– “We aim to issue $35 billion in green bonds by 2030 to fund public sector green infrastructure. This will include government-issued bonds as well as statutory boards.”
– “To act decisively to achieve our new ambition of net zero. You will need a higher carbon tax. So I will increase our carbon tax to $25 per ton in 2024 and 2025 and to $45 per ton in 2026 and 2027 with a view to reaching $50 to $80 per ton by 2030. The current tax of $5 per ton will remain unchanged until 2023.”
($1 = 1.3419 Singapore dollars)
Join now for FREE unlimited access to Reuters.com
Compiled by Martin Petty; Editing by Kim Coghill
Our standards: The Thomson Reuters Trust Principles.