Singapore announces 2022 budget proposals by Reuters

© . FILE PHOTO: The financial district is shrouded in a haze in Singapore on Sept. 18, 2019. REUTERS/Feline Lim () -Here are some excerpts from Singapore’s 2022 budget proposals that will be presented to parliament by Finance Minister Lawrence Wong on Friday announced. For a full story, see SUPPORT PACKAGES – “There are segments of the economy that are still struggling. I will therefore provide targeted assistance to our employees and companies in these sectors through an S$500 million ($372.61 million) job and business support package.” – “I recognize the immediate concerns of businesses and households and will provide significant additional support…these amount to a substantial S$560 million package to assist Singaporeans with their energy bills, children’s education and daily necessities.” EXPENDITURE AND INCOME – “On the expenditure side, our needs are significant and growing. By 2030, we expect government spending to increase to over 20% of GDP. Most of this increase in spending will go to health care.” – “We will set aside $6 billion to maintain a multi-layered public health defense. This is necessary for us to respond nimblely and confidently to the evolving COVID-19 situation.” – “On the revenue side, we would not have enough to cover additional expenses… Therefore, in this budget, we will make significant improvements to our tax system.” WEALTH TAXES – “Wealth taxes are therefore necessary to build a more equitable society in which everyone can strive for success regardless of their background… Ideally we would like to tax the net wealth of individuals. But such a tax is not easy to implement. ” – “I am raising the property tax rates for non-residential properties, including investment properties. For such properties, I am raising the property tax rates from 10 to 20% … to 12 to 36% of all non-residential properties -owners- – “When fully implemented, they will increase our property tax revenues by about $380 million a year.” – “I will also tax luxury cars at a higher rate to make our motor vehicle tax system more progressive. I will be submitting an additional RFP (request for proposal) for cars at a rate of 220% for the portion of the open market value over $80,000.” GOODS AND SERVICE TAX “I also understand the concerns Singaporeans have about the increase in along with rising prices. I have therefore decided to postpone the GST increase until 2023 and to spread the increase over two steps. 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 TAX “I am therefore increasing the highest marginal rate of personal income tax, or the PIT rate, with effect from tax year 2020. For the part of the Income owed over $500,000 to $1 million will be taxed at 23%, while that over $1 million will be taxed at 24%, both at 22% today. This increase is expected to affect the 1.2% largest taxpayers for personal income and will generate $170 million in additional tax revenue per year. – “Our corporate tax system will need to be updated due to global tax developments.” “What this means is that if such an MNO (Multinational Company) were to have an effective tax rate of less than 15% in Singapore at the group level, other jurisdictions, such as its own jurisdiction, could collect the difference up to 15%.” “In response, we will adjust our tax system… We are investigating an additional tax called the Minimum Effective Tax Rate or METR. The METR will increase the effective tax rate of the multinational group in Singapore to 15%.” INVESTMENT AREAS – “This budget will deliver 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 create a streamlined and develop more resilient structures.” – “We will also invest in future technologies such as 6G, to handle the next wave of communication and connectivity.” – “In addition to infrastructure improvements, I will be setting aside an additional S$200 million offering in the coming years to enhance schemes and build digital capabilities in our businesses and employees.” FOREIGN EMPLOYMENT AND Wages – “Let me emphasize that Singapore will continue to be open and welcome talent from all over the world. The adjustments in our foreign worker policy are mainly affecting the broad middle of the workforce.” – “We will update the framework for Employment Pass (EP) holders…From September of this year, the minimum qualifying salary for new EP applicants will be increased from the current S$4,500 to S$5,000. For the financial sector, requiring higher salary standards, this will be increased from the 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 foreign workforce, and also to increase the certainty and transparency of companies.” – “All of us, businesses, consumers and taxpayers will have to do our part and contribute to improving our lower-wage workers. I recognize that some companies need time to adapt … Others may find it difficult to raise prices in the short term to support wage increases.” – “I would therefore introduce the Progressive Wage Credit Scheme, or PWCS, to support companies in the transition phase.” – “Under the PWCS, the government will co-finance wage increases for lower-wage workers between 2022 and 2026. For workers earning up to S$2,500, the PWCS co-financing rate will be 50% in the first two years and 30%. next two years before phasing out to 15% by 2026.” – “We will spend an average of $1 billion a year over the next five years, or $9 billion in total for the PWCS…It’s a significant increase and it reflects our shared commitment to bettering our lower-wage workers.” GREEN COMMITMENTS – “We believe we can advance our net-zero timeline. We will therefore increase our ambition to reach net-zero emissions by or around the middle of the century.” – “The path to net zero will involve significant economic restructuring and changes in the way we live and work in the future. Everyone … will face difficult choices. Expensive investments may be required.” – “We aim to issue $35 billion in green bonds by 2030 to fund public sector green infrastructure. This includes both government and statutory government bonds.” – “To continue resolutely to reach our new net-zero ambition. You need a higher carbon tax. I will therefore increase our carbon tax to $25 per tonne in 2024 and 2025 and $45 per tonne in 2026 and 2027 with a view to reaching 50 to $80 per ton by 2030. The current $5 per ton tax will remain unchanged until 2023.” ($1 = 1.3419 Singapore Dollar)

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