Minister for Finance, Mr Heng Swee Keat, delivered the Budget Statement for the Financial Year 2018 on 19 February 2018. We set out below a summary of highlights against the backdrop of our anticipated key themes in public policy developments in Singapore in 2018.
1. Fiscal position / Economy
Overall, the initiatives announced in the Budget continue to support Singapore’s pro-business environment. The transformation of the future economy continues to be at the forefront with initiatives focused on innovation and capability building for both traditional sectors of strength for Singapore and new areas involving technology. There is also increased focus on forging networks in ASEAN and beyond, with a focus on infrastructure.
- Corporate Income Tax rebate increased to 40% of tax payable, capped at S$15,000.
- Widely anticipated increase in GST to 9% to only kick in progressively from 2021 to 2025.
- GST on imported services, including apps and downloaded music from overseas, from 2020.
- Enterprise Development Grant for up to 70% co-funding for capability-building.
- Capability Transfer Programme to transfer skills from foreign specialists.
- Open Innovation Platform in 2018, expansion of Tech Skills Accelerator, launch of Aviation Transformation Programme and Maritime Transformation Programme.
- ASEAN Leadership Programme, ASEAN Innovation Network, launch of Infrastructure Office.
2. Population trends / 3. Healthcare
The Budget included measures relating to population trends and the anticipated increased spending on infrastructure and healthcare to cope with such trends.
- By 2030, the total number of elderly will increase by about 450,000, to 900,000.
- Healthcare spending is expected to overtake education in the next decade, with more general and community hospitals, polyclinics and nursing homes and eldercare centres. ElderShield is also undergoing review.
- To distribute the share of funding more equitably across generations, Statutory Boards and Government-owned companies to look into borrowing to build infrastructure, spread the cost of certain larger investments over more years, without drawing directly on reserves.
- 10% increase in tobacco excise duty.
The Budget imposes higher buyer stamp duty as a progressive tax against the backdrop of recent en bloc activity, record land bids and rising private home sale prices.
- The new top marginal rate of 4% will apply to the portion of residential property with value in excess of S$1 million.
There was a focus on education in the Budget, as a means to level social inequality and promote social mobility.
- The Government is spending more per child, and to ensure that everyone one has access to qualify education. The Government will also continue to invest in lifelong learning.
6. Other developments
The Budget showcased how the Government is delivering on its pro-environment commitment, and demonstrated a continued focus on Smart Nation Initiatives.
- Carbon tax on all facilities producing 25,000 tonnes or more of greenhouse gas emissions in a year from 2019, introduction of grants and support to enhance energy efficiency and reduce emissions.
- Investment in security.
- Strategic Smart Nation projects, including a Smart Nation Sensor Platform, a National Digital Identity system, the increased adoption of
e-payments island-wide, and opening up digital platforms for the private sector to build innovative services.
Should you have any queries as to how these developments may affect your business, please do not hesitate to get in touch with any of the following:
+65 6890 7710
+65 6890 7663
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With decades of experience working in and with the legislative, executive and judicial branches of governments, members of the practice have also held senior level appointments and legal advisory positions in governments. Clients of the practice range from major corporations and financial institutions seeking multifaceted strategies and novel solutions to unprecedented legal and regulatory challenges.