Budget 2018: Government to extend 250% tax deductions for donations for three more years

Budget 2018: Government to extend 250% tax deductions for donations for three more years

HSK Budget SS 7
Finance Minister Heng Swee Keat delivering the Budget 2018 statement.

SINGAPORE: The Government’s current tax deductions of 250 per cent for qualifying donations will once again be extended for another three years, said Finance Minister Heng Swee Keat during his Budget speech in Parliament on Monday (Feb 19).

The extension will apply until Dec 31, 2021.

Mr Heng said he was heartened to see that the volunteerism rate has doubled in the last decade, while total donations have increased from S$2 billion in 2011, to S$2.7 billion in 2015.

“To foster this spirit of giving in our people, we will enhance support for measures that encourage everyone to contribute to the community,” Mr Heng.

With the tax deductions, for every S$1 donated to a registered charity, S$2.50 will be deducted from one’s taxable income. Cash donations, gifts such as shares and artefacts will also qualify for tax deductions.

The Government will also enhance its online platform, Giving.sg, to better match donors and volunteers with charities that need support.

Additionally, Mr Heng said the Government will also increase its support to the five Community Development Councils (CDCs). Currently, it matches S$3 for every dollar raised by CDCs, up to an annual cap of S$24 million.

From this year, Mr Heng said the cap will be raised to about S$40 million.

He also announced extensions to an initiative to encourage corporates in supporting their staff to volunteer and donate. Mr Heng said the Business and IPC Partnership Scheme (BIPS) will be extended to three more years, also until Dec 31, 2021.

The scheme was piloted in 2016, and allows businesses that send their staff to volunteer and provide services to IPCs such as secondments to receive a 250 per cent tax deduction on wages and incidental expenses. The qualifying expenditure under the Scheme is capped at S$250,000 per business year of assessment and S$50,000 per IPC per calendar year.

Finally, Mr Heng also touched on donations received under the Presidents Challenge, an annual charity event. He said the Government would provide dollar-for-dollar matching on donations received by the Empowering for Life Fund (ELF) under the Challenge for the next five years.

The Finance Ministry said the ELF is a five-year fund set up under the Presidents Challenge this year. It will support programmes providing skills-upgrading and employment for “the most vulnerable”, in a bid to encourage self and family reliance.

The fund was announced by President Halimah Yacob earlier this month.

Source: CNA/mo