Aging Singapore unveils tax increase measures

Aging Singapore unveils tax increase measures

Finance minister Heng Swee Keat has announced a one-off "SG Bonus" from S$100 to S$300 for all citizens after the nation-state enjoyed a "surplus budget".

The bonus comes after Singapore's trade-reliant economy grew 3.6% in 2017, its best pace in three years.

"This eases the need for a future government or administration to announce the GST", Ng said. In the last one in 2015, the ruling People's Action Party won 70 percent of the vote, a strong improvement from the 60 percent garnered in 2011.

He expects the adjustment to be made earlier, rather than later, in the stated period. The headline corporate tax rate in Singapore is 17 per cent. Singapore online shoppers now were not taxed for purchases valued at below S$400.

Digital services such as Netflix and Spotify, and possibly even software tools like Microsoft Office 365, could attract a goods and services tax (GST) in Singapore from January 1, 2020, as part of the country's Budget 2018.

In his speech on Monday, he said that it "reflects the Government's long-standing commitment to sharing the fruits of Singapore's development with Singaporeans".

The tax will initially be levied at $5 Singapore dollars ($3.8 US) on all facilities which produce 25,000 tonnes, or more, of greenhouse gas emissions each year.

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Infrastructure spending, including the construction of a massive new airport terminal to be opened in the mid 2020s, anti-terrorism measures, as well as education were the other major areas that would benefit from the boost in government coffers, Heng said.

The minister estimated that a two percentage point increase in GST will provide a revenue of nearly 0.7 percent of GDP per year.

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

During his speech, the 56-year-old former central bank chief said that while the government was now on "sound fiscal footing", there would be a revenue shortfall in the next decade if fresh measures were not enacted.

This still means the corporate tax will remain low for startups and smaller firms, said Mr Heng.

But the planned Singapore tax is still well below the €30 (US$37) per tonne climate scientists and economists believe is necessary to cover the environmental costs of pollution.

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