| |
SINGAPORE : Finance Minister Tharman Shanmugaratnam announced on Friday a 20 percent tax rebate for Singaporeans.
However the Government will keep income tax unchanged, a surprise move that leaves the top personal rate at 20 percent.
"We will not be making any further move on personal income tax this year," he told Parliament during the Budget announcement.
However he added: "As the Government had a strong surplus last year,...we will give something back to taxpayers this year. I will give an income tax rebate of 20 percent for all resident taxpayers for Year of Assessment 2008.
"The rebate will be capped at S$2,000. Having this cap allows us to target the rebate at those below the top income brackets. The income tax rebates will cost the Government S$380 million."
The Government expects a Budget surplus of S$6.4 billion in the year to March instead of an earlier projected deficit.
Mr Tharman said the surplus was supported by strong economic growth which came in at 7.7 percent for 2007.
Revenue from corporate and personal income taxes and the goods and services tax had exceeded government projections, he said.
The largest boost to revenue came from the buoyant property market which saw private residential units rise by over 30 percent, much higher than industry forecast of about 10-15 percent.
To encourage voluntary savings, tax reliefs have been raised to S$7,000 for CPF top-ups.
He noted that for most taxpayers, Singapore's income tax regime is already one of the most competitive in the world.
He said: "We will continue to keep our taxes competitive so as to provide every incentive for work and enterprise, and generate economic growth for the future."
But the government did abolish estate duty, or death tax, to become more attractive to wealthy individuals.
The Finance Minister said: "It is not just a practical or expedient measure, but one that on balance will be in our collective interest. If we make Singapore an attractive place for wealth to be invested and built up, whether by Singaporeans or foreigners who bring their assets here, it will benefit our whole economy and society, not just the individuals who build up their wealth. It is not a zero sum game."
The Finance Minister also announced that the special tax on Euro-IV diesel cars will go down from July 1st.
Under the revised structure, the tax will S$1.25 per cubic centimetres of engine capacity, subject to a minimum annual payment of S$1,250.
Currently it is priced at four times of road tax.
So from July, a 6-month tax for a 1,600 cc Euro-IV diesel car will be S$1,000 instead of S$1,488.
The new structure is aimed at narrowing the difference in the cost of fuel consumption between a diesel and a petrol car.
Vehicle owners may choose to make payment every 6 months or annually.
However the special tax for diesel taxis and non-Euro-IV diesel cars remains unchanged.
The special tax for taxis is S$5,100 annually and six times road tax for non-Euro-IV diesel cars.
Take part in the Budget poll or share your comments on the policy at the Budget Special .
|
