See More on Facebook

Economics

Singapore’s new budget addresses short term concerns

In addition to measures to ease short-term concerns, much of Singapore’s 2018 budget was dedicated to positioning the country for the future.


Written by

Updated: February 26, 2018

Singapore Finance Minister Heng Swee Keat delivered the Budget statement 2018 in parliament on Feb 19.

In his speech, Heng identified three major shifts in the coming decade for which the city-state would have to prepare. The first is a shift in global economic weight towards Asia as other advanced economies pull back. The second is the emergence of new technology as the fourth industrial revolution kicks off and the last is the country’s aging population.

To best meet the challenges, Singapore will have to build on four key areas: developing a vibrant and innovative economy, building a smart, green and livable city, fostering a caring and cohesive society, and planning ahead for a fiscally sustainable and secure future.

Here are some of the measures announced during the speech.

GST hike

Speculation about an impending tax that dominated news and discussions ahead of the Budget has proven accurate. The goods and services tax will be increased by two percentage points from 7% to 9% – the first hike in more than 10 years – in order to facilitate increased government spending in areas such as healthcare in the years to come.

The change will happen sometime between 2021 to 2025, depending on the state of the economy, how much expenditures grow, and how buoyant existing taxes are.

Heng said that the increase would be implemented in a progressive manner and announced that the permanent GST Voucher (GSTV) scheme will be enhanced to help lower-income families manage.

At present, about $800 million is disbursed from the fund each year. This year, the fund will be topped up by $2 billion.

Helping firms and workers build a vibrant and innovative economy

To help keep companies from buckling under near-term cost pressures, Heng unveiled a Corporate Income Tax rebate increase to 40 per cent of tax payable, capped at $15,000 and an extension of the CIT rebate at 20 per cent until Year of Assessment 2019, capped at $10,000.

The Credit Wage Fund Scheme, which co-funds wage increases for Singaporeans, was also extended.

In addition to measures to help ease short-term difficulties, the Budget also outlined longer-term strategies to help the nation seize future opportunities, including measures to promote innovation.

The tax deduction on licensing payments for the commercial use of intellectual property (IP) was raised.

Research and development was another area that received a boost, with an increase in tax deduction for qualifying expenses incurred on R&D done in Singapore from 150 percent to 250 percent.

Going green with a carbon tax

Noting that a strong economy is not an end in itself, Heng outlined plans to improve Singapore’s living environment and make the nation a smart, green and livable city.

In addition to other measures, the government intends to implement a carbon tax from 2019 on all facilities producing 25,000 tonnes or more of greenhouse gas emissions in a year.

The carbon tax will be $5 per tonne of greenhouse gas emissions from 2019 to 2023 after which it will be reviewed. The government intends to increase it to a rate of between $10 and $15 per tonne of emissions by 2030.



Enjoyed this story? Share it.


Nadia Chevroulet
About the Author: Nadia is an Associate Editor at Asia News Network.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Economics

Thailand’s KBank to launch e-wallet, invests $50 million US in Grab Taxi

Grab on Thursday announced a partnership with Thailand’s Kasikornbank to launch mobile payment application GrabPay by KBank. The mobile wallet, which is slated to be launched as soon as early 2019, will allow Grab customers to pay for transport and delivery services, transfer funds, purchase products and services online, and make QR-code payments in restaurants and shops across Thailand. Through Thailand’s national e-payments scheme called PromptPay, all three million QR-enabled merchants in the country will be able to accept GrabPay by KBank.


By The Straits Times
November 9, 2018

Economics

China Trade War Update

China has kicked off the country’s first ever international import expo in Shanghai, an event designed to boost China’s image as a market to the world. President Xi Jinping, in his opening remarks, said that the Shanghai expo isn’t simply an trade fair, rather it should be viewed as a “major policy for China to push for a new round of high-level opening-up and a major measure for China to take the initiative to open its market to the world.” The Import Expo was not initially designed as an answer to the trade war with the United States—the expo was first announced more than a year ago in May of 2017, long before the first shots of the trade war were fired—but in a way that’s what it has become. President Xi


By Quinn Libson
November 8, 2018

Economics

Seoul granted waiver to buy Iranian oil

South Korea was granted a waiver that will temporarily allow it to continue importing Iranian oil. The US granted the waiver to eight countries, including China and India, the biggest buyers of Iranian oil, to keep crude oil prices stable. The countries will be able to buy Iranian oil for up to 180 days despite the reimposed sanctions. Seoul was also granted an exemption to continue financial transactions with Iran’s central bank, allowing South Korea to continue trading oil as well as nonsanctioned items with Iran, Seoul’s Foreign Ministry said. Seoul hailed the move as a sign of the strong alliance between Seoul and Washington. South Korea, one of Asia’s biggest buyers of Iranian oil, had asked Washington for an exemption, given that petrochemicals are key to its economy and the sanctions would exact a toll on the country’s businesses. “(We explained to the US that) if South Ko


By The Korea Herald
November 6, 2018

Economics

Pakistan-China meeting hints at reinforced ties

Pakistan – China Joint Statement speaks of expansion in ties, no mention of immediate support. Ties between China and Pakistan will be significantly deepened across a range of areas, from economic and cultural cooperation to foreign policy in regional as well as global platforms, as per the Joint Statement issued on Sunday by both countries at the conclusion of Prime Minister Imran Khan’s maiden visit to Beijing. The statement, however, makes no mention of any ‘immediate support’for Pakistan. Prior to their departure for the visit, the Pakistani delega


By Dawn
November 5, 2018

Economics

Xi opens import summit in Shanghai

The leader said that the summit belongs to world and shows China’s commitment to opening up its economy The inaugural China International Import Expo, which opens in Shanghai on Monday, is hosted by China but belongs to the world, President Xi Jinping said on Sunday. The expo is not an ordinary event, but marks China’s new round of advancing high-level opening-up as well as the country’s taking significant steps to open its market to the rest of the world, Xi said when addressing a banquet that he and his wife, Peng Liyuan, hosted in Shanghai to welcome foreign guests attending the event. Xi said the expo will help deepen international trade and economic cooperation, promote Belt and Road construction and advance economic globalization. It will make positive contributions to enhancing the well-being of peoples from around the world as well as building a community with a shared f


By China Daily
November 5, 2018

Economics

Goldman Sachs and 1MDB

The US Justice Department’s first charges against individuals related to the pillaging of the Malaysia investment fund known as 1MDB offers several new insights into the global, multibillion-dollar scandal. For­mer Goldman Sachs banker Roger Ng has been arrested in Malaysia while his former colleague Tim Leissner pleaded guilty in New York over financial transactions related to 1Malaysia Development Bhd (1MDB). The United State’s Department of Justice (DoJ) has charged Leissner alongside fugitive financier Low Taek Jho, also known as Jho Low (pic), over funds misappropriated from 1MDB and paying bribes to various Malaysian and Abu Dhabi officials. The three-count indictment charges Low with misappropriating money from 1MDB and using it for bribes and kickbacks to foreign officials, to pay for luxury real estate, art and jewellery in the U


By The Star
November 2, 2018