Finance Minister Tharman Shanmugaratnam announced the Budget for 2013 on Monday. Here is a summary of some of the main changes:
MEASURES AFFECTING HOUSEHOLDS
Payouts
The Government will double the total payouts for utilities rebates, Central Provident Fund (CPF) Medisave accounts and Goods and Services Tax (GST) vouchers this year.
On top of the permanent GST voucher payout, there will be an extra GST voucher. That means all eligible Singaporeans will get double the usual amount.
This will benefit about 1.4 million Singaporeans, costing the Government an extra S$680 million.
There will also be a one-off S$200 top-up to Medisave accounts of all Singaporeans aged 45 and above, benefitting 1.5 million Singaporeans.
Foreign Domestic Worker Levy
To help families who hire foreign domestic workers to care for young children, seniors and dependents with disabilities, there will be a cut on the concessionary foreign domestic worker levy from S$170 to S$120 a month from 1 March 2013. This will benefit about 122,000 households. The non-concessionary levy is $265 a month.
Cars
The existing Additional Registration Fee (ARF) paid by car buyers is 100 per cent of the car?s open market value (OMV). This will be replaced by a tiered structure, where more expensive cars will yield higher rates.
- An economy passenger car with an OMV of up to S$20,000 will see no change in ARF rate.
- A car with an OMV of up to S$50,000 will pay up to S$12,000, or 24 per cent more ARF.
- A luxury car with an OMV of S$75,000 will pay S$32,000, or 43 per cent more ARF
The tiered ARF structure will apply to vehicles registered with Certificates of Entitlement (COEs) obtained from the first COE bidding exercise in March 2013
Personal Income Tax
- A 30-per-cent tax rebate for resident taxpayers aged below 60 (as at 31 December 2012), capped at S$1,500.
- A 50-per-cent tax rebate for those aged 60 and above (as at 31 December 2012), capped at S$1,500.
Property Tax
Changes in property tax rates will be done over two years, starting 1 January 2014, with revised rates taking full effect from 1 January 2015.
For owner-occupied properties, the property tax will be lower, except for the one per cent of top-end homes. The 99 per cent of homes (about 950,000 properties) with an annual value of less than S$59,000 will enjoy tax savings of up to S$80. The savings will cut the Government?s property tax revenue by S$44 million.
- All one-room and two-room Housing Board (HDB) flat owners do not need to pay tax while living in the flats.
- Those living in a five-room HDB flat valued at S$12,000 a year, for example, will pay S$160 tax, down from S$240 (a 33-per-cent drop).
- Those living in a landed property in the central area valued at S$150,000 a year, for example, will pay S$12,580 tax, up from S$7,460 (a 69-per-cent increase).
(Table: Budget 2013 media release)
For non-owner-occupied investment properties, there will be an increase in property tax rates. The increase is biggeest for top-end homes.?
- In an estimated example, the owner of a landed property in the central area with an annual value of S$150,000 will pay a tax of S$24,000, up from the current S$15,000 (a 60-per-cent increase).?
- For a suburban condominium valued at S$35,000 a year, the property tax will go up an estimated three per cent from S$3,500 to S$3,600.
- For a five-room Housing Board (HDB) flat valued at S$12,000 a year, the property tax is estimated at S$1,200 and there will be no increase.
(Table: Budget 2013 media release)
Education Support
The Government will double spending on preschool sector over the next five years to more than S$3 billion. These include scholarships and salary and training grants for teachers, providing more places for children by 2017, and building more centres closer to homes and workplaces.
To help disadvantaged students, the Government will extend the learning support programme beyond the early primary school years, which will need about 600 extra specially-trained teachers.
The number of school-based student-care centres in primary schools will be expanded to give extra development support outside school hours.
Support for Seniors
The Government will give subsidies for a wider range of devices such as motorised wheelchairs, shower chairs and hearing aids for low- to middle-income seniors to help them stay active and independent.
There will be also be subsidies for healthcare products such as milk feeds and diapers for low-income seniors living at home.
The funding will increase from the current S$10 million to S$50 million.
MEASURES AFFECTING BUSINESSES / WORKFORCE
Foreign Worker Policies
The Government will raise foreign worker levies for all sectors, including construction and manufacturing.
It will also tighten eligibility requirements for S Pass and Employment Pass applicants, such as the qualifying salary.
Income Support
The Workfare Income Supplement scheme has been around to supplement the wages and retirement savings of older low-wage workers and to encourage them to stay employed.
The monthly income ceiling for those who can be covered by this scheme is now raised from S$1,700 to S$1,900. The payouts will benefit about 480,000 Singaporeans or 30 per cent of the citizen workforce.
Workers will now get a higher cash payout ? with 40 per cent in cash (up from 29 per cent) and 60 per cent through CPF. For example, a 60-year-old worker earning S$1,000 a month will get a yearly payout of S$3,500, of which S$1,400 will be paid in cash.
The Government will tighten the eligibility criteria for this scheme to exclude any worker whose spouse earns more than S$70,000 a year, and individuals or couples who own a second property.
For CPF contribution rates, workers earning S$1,500 or less will see the employer and employee contribution rates fully restored from 1 January 2014.
For example, the employer contribution rate of a 45-year-old earning S$800 a month will be restored from 11 to 16 per cent, and his or her employee contribution rate restored from 16.5 to 20 per cent.
Business Support
There will be S$5.3 billion worth of support to businesses.
For the next three years under the Wage Credit Scheme, the Government will co-fund 40 per cent of wage increases for Singaporean employees who earn a gross monthly income of up to S$4,000. The co-funding payout will be to employers.
For example, if an employer increases the gross monthly wage of his employee by S$200 in 2013, the Government will co-fund 40 per cent of this S$200 increase and also for the next two years if the increase is?sustained. The scheme will cost the Government S$3.6 billion over three years.
There will be a corporate income tax rebate of 30 per cent, capped at S$30,000 per year, for years of assessment 2013 to 2015. This is to help companies cope with cost pressures.
Road Tax
There will be a one-year 30-per-cent road tax rebate for good vehicles, buses and taxis to take effect from 1 July 2013.
Certificate of Entitlement (COE)
Owners of commercial vehicles who want to renew the COEs for their vehicles for five years ? when renewal is due at the end of 10 years ? may choose to extend it for another five years. (Right now, they cannot do so or have to pay more for a 10-year renewal.)
Source: http://news.insing.com/tabloid/spore-budget-property-tax-rates-wage-support/id-ea6d3f00
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