The Singapore budget, which takes effect from 1 April 2011, took place on 18 February 2011. The proposals announced have no direct impact on Skandia International’s business.
Minister for Finance, Mr Tharman Shanmugaratnam, delivered the budget speech for the financial year 2011 in parliament. A summary of the main intentions of the budget are detailed below.
This year’s Budget seeks to strengthen both Singapore’s economy and society for the future. Mr Shanmugaratnam stated:
“We are taking major steps to enable Singapore to be a first-rate developed society a decade from now.
We can deal with the immediate problems. The rising cost of living is a concern. We are providing lower and middle-income Singaporeans with benefits in this Budget that for many households will more than offset their increase in household expenses – even before taking into account any wage increases.
Our core agenda however is focused on the longer term. We want to grow Singaporeans’ incomes significantly, by transforming productivity. It cannot be achieved overnight, but we are investing substantial resources towards doing so – by helping our businesses invest and restructure, and by developing skills and mastery in every job. Through continuous improvements as well as breakthroughs, we must succeed in raising productivity in every sector, so that we achieve a 30% improvement in real median incomes over the next decade.
We must also ensure an inclusive society, where everyone, including the lower-income group, can contribute to and share in Singapore’s progress. We must sustain growth if we are to achieve this, but growth on its own will not be sufficient. That is why the Government has been intervening actively to support those lower down the income ladder. We are doing more in this Budget. We are significantly expanding support for children from lower-income families. We are also helping lower-income workers to get more from work, and to own their homes.”
Summary of this year’s changes
- There are no changes to taxes or tax rates before 1 April 2012. There are, however, a series of one-off benefits for individuals. The aim of these is to reduce the income tax they pay on earned income, or increase the benefits for those individuals who are eligible to receive income support benefits.
- There are reductions to the tax rates applicable for individuals from 1 April 2012 - the Year of Assessment (YA) 2012. Changes are shown below.
Tax table 2012 (Click image to enlarge)
- Employer pension contributions to the Central Provident Fund (CPF) will be increased from September 2011. The total CPF contribution rate will increase by 0.5%, to 36%.
- One-off Corporate Income Tax (CIT) Rebate/SME Cash Grant:
To help companies cope with rising costs, companies will be granted a 20% CIT rebate, capped at $10,000 for YA 2011.
OR
To help companies that pay little or no tax, a cash grant of 5% of qualifying revenue for YA 2011, capped at $5000, will be given. To qualify, the companies should have made CPF contributions in 2010.
Companies will automatically receive the higher benefit on submitting their tax return for YA 2011.
Further information about the budget can be found on the Ministry of Finance’s micro site for the Singapore Budget:
http://www.singaporebudget.gov.sg/budget_2011/key_initiatives/index.html
The information provided in this article is not intended to offer advice. It is based on Skandia's interpretation of the relevant law and is correct at the date shown at the top of this article. While we believe this interpretation to be correct, we cannot guarantee it. Skandia cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained in this article.