Singapore budget updates on Tax
The Singapore budget was announced by the finance minister Mr Lawrence Wong on 18 February 2022. Some tax updates from the budget included building a fair and resilient tax system in Singapore. The government’s main motive was to improve transparency in tax compliance.
The government’s main motive was to improve transparency in tax compliance.
Key Tax updates of the budget
● As a part of the budget, the government planned to increase the Goods and Services Tax (GST) rate from 7% to 8% and 9% respectively. The government has provided a timeline for the GST increase which would be effective from the Year of Assessment (YA) 2023 and YA 2024.
● Individual taxes will increase from YA 2024.
● Property tax in Singapore would increase for residential properties. Along with this, an additional registration fee would be charged on luxury vehicles.
Assurance Package for GST Increase
The Singapore government has allocated a cushion amount of S$ 6.6 billion against the increase in GST. As a part of this assurance package, the following would be provided in Singapore:
● Every adult citizen of Singapore shall receive S$ 700 to S$ 1,600.
● An additional cash incentive of S$ 600 to S$ 900 shall be provided to
lower-income senior citizens.
● An additional amount of S$ 330 to S$ 570 for U-Save rebates will be provided.
● S$ 450 MediSave top-ups for children below the age of 20 years and seniors above the age of 55 years.
● There shall be no increase in government fees for 2023.
Key Takeaways
The government of Singapore has increased the rate of GST as per the budget. As a cushioning effect, the government has provided specific cash grants for individuals. The increase of GST will contribute to a resilient tax system in Singapore.
