Economists: Expect larger-than-expected Budget surplus

Singapore to pay each citizen up to KSh 23,000 as bonus in 2018 due to excess budget

Singapore to pay each citizen up to KSh 23,000 as bonus in 2018 due to excess budget

And while the government had yet to confirm plans to include e-commerce in Singapore's tax regime, Lee said this likely would be unveiled in due course and stressed the need for online commerce operators to be prepared.

Top marginal buyer's stamp duty (BSD) for residential properties priced at more than $1 million will be 4% with effect from Feb 20, announced Minister for Finance Heng Swee Keat on Feb 19 during the Singapore 2018 Budget Speech (see Table).

He said the exact timing of the increase would depend on the state of the economy and on the extent to which existing revenue and expenditure expand in coming years.

"We do not expect either to occur every year; it is not a structural surplus", said Mr Heng.

"The GST increase is necessary because even after exploring various options to manage our future expenditures through prudent spending, saving and borrowing for infrastructure, there is still a gap", the minister said.

The GST will go up from the present 7% to 9% while the hike is expected to yield government revenue of almost 0.7% of GDP per year, he said.

Singapore introduced its GST in 1994, with a 3 per cent rate.

The overall budget deficit for the 2018/19 fiscal year starting on April 1 is expected to be S$600 million, Heng said.

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The Goods and Services Tax (GST) will be increased to 9 percent from 7 percent sometime from 2021 to 2025.

This budget, experts say, takes a significant step forward by setting a targeted strategy for the next decade, especially on the need for businesses to move away from cost competition and differentiate through innovation.

To help Singaporeans cope with the hike, Singapore will be enhancing its GST Voucher (GSTV) scheme with a S$2 billion top-up to the GSTV Fund.

The tax, to be applied to all sectors, will be $3.8 per tonne of greenhouse gas emissions from 2019 to 2023, after which the levy will be reviewed and possibly raised to between $7.62 and $11.43 per tonne by 2030.

"With an ageing population and an increasing chronic disease burden, the demands on families and Government will rise", the finance minister said.

"Currently, we spend up to 50 per cent of expected net investment returns, and keep the remainder in our reserves".

This will help to cover the annual impact of the carbon tax, which is estimated to result in up to an average of $13.70 in additional electricity and gas expenses.

Those with an assessable income of $28,000 (Sh2.1 million) and below during the last financial year will be awarded $300 (Sh23,000) while those earning between $28,001 and $100,000 (Sh2.1m to Sh7.6m) will get Sh15,350 (S$200).

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