Finance Minister Lawrence Wong unveils major tax measures to fund spending needs
Singapore to raise GST from 7% to 9% in two stages in 2023 and 2024
Assurance Package increased to $6.6 billion; GST Voucher scheme beefed up to offset GST hike
Higher personal income taxes for top 1.2% of taxpayers in Singapore
Higher taxes on residential properties, luxury cars, as Singapore adjusts wealth taxes
By Justin Ong, Political Correspondent, The Straits Times, 18 Feb 2022
Singapore on Friday (Feb 18) unveiled a slew of progressive tax measures aimed not only at generating revenues to fund major programmes needed over the next few years, but also at addressing social inequalities.
The hike in goods and services tax (GST) to fund the recurring social and healthcare needs of a rapidly ageing population was further delayed to 2023 in response to concerns over rising prices.
The hike will be staggered over two steps - with GST rising from 7 per cent to 8 per cent on Jan 1 next year, and then to 9 per cent from Jan 1, 2024. The impact of the increase will be cushioned, especially for low-income households.
The wealthy will also pay more of other taxes.
"Those who earn more, contribute more," said Finance Minister Lawrence Wong in his first Budget since assuming the portfolio in May last year, as he outlined increases in personal income, property, vehicle and carbon taxes as part of an expansionary $109 billion Budget, including special transfers.
He also announced a $6 billion draw on the reserves as part of Singapore's continuing fight against Covid-19, and over $1 billion in support for businesses, households and individuals hard-hit by the pandemic.
With a view to future challenges and opportunities, Mr Wong said he would commit up to another $1 billion or so to spur companies to invest in new capabilities, while further tightening workforce policies to ensure foreign hires of the "right calibre".
This year's Budget will run up an expected overall deficit of $3 billion, amid a tone of cautious optimism sounded by Mr Wong as Singapore enters a period of transition and recovery after two years of grappling with the pandemic and its fallout.
"The global economy is still vulnerable to pandemic-related risks, and further supply chain disruptions. Geopolitical and security risks loom," he warned at the start of his speech, which was around two hours long. "We may also see a slowdown in external demand as the major economies scale back their pandemic support, and central banks tighten their accommodative monetary policies to deal with the threat of inflation."
But barring fresh disruptions, Mr Wong said he expects the Singapore economy to continue to do well, and grow by 3 per cent to 5 per cent this year.
Looking ahead, with government expenditures projected to increase significantly in the coming years - especially in healthcare - enhancements to Singapore's tax system would be needed to raise additional revenue, he added.
"That means everyone chips in and contributes to a vibrant economy and strengthened social compact, but those with greater means contribute a larger share," said Mr Wong, who also co-chairs a multi-ministry task force handling the pandemic.
To that end, personal income tax will be increased from 2024. The portion of chargeable income in excess of $500,000 up to $1 million, will be taxed at 23 per cent, up from 22 per cent currently. Chargeable income in excess of $1 million will be taxed at 24 per cent.
Property tax rates will also be increased, with more significant hikes for high-end properties, said Mr Wong.
For non-owner-occupied residential properties, including investment properties, tax rates will go up from the current 10 per cent to 20 per cent range, to 12 per cent to 36 per cent.
For owner-occupied ones, tax rates for the portion of annual value in excess of $30,000 will be increased from the present 4 per cent to 16 per cent, to 6 per cent to 32 per cent.
Luxury cars will be taxed at a higher rate, with an additional Additional Registration Fee tier for cars at a rate of 220 per cent for the portion of Open Market Value in excess of $80,000.
The GST hike, pushed back to 2023 and staggered over two steps, will be heavily cushioned.
A previously announced $6 billion package to help soften the blow of the GST hike will be topped up with $640 million.
To better support the daily needs of the lower-income and elderly, the permanent GST Voucher scheme - now comprising cash, utilities and medical rebates - has also been enhanced, with service and conservancy charge (S&CC) rebates becoming an additional permanent component.
Meanwhile, the projected $6 billion draw on the reserves "to maintain a multi-layered public health defence" against Covid-19 has received in-principle support from President Halimah Yacob.
This will be the third year in a row that the reserves are being tapped, bringing the total expected drawdown for the three financial years of 2020 to 2022 to $42.9 billion - less than the initial sum of $52 billion the Government earmarked in 2020.
This reflects Singapore's prudence in the use of past reserves, he said, explaining that Singapore's pandemic response had averted worse public health outcomes, and that the rebound in economy and businesses had been stronger than expected.
Still, in recognition that some segments of society continue to struggle, Mr Wong announced a $500 million Jobs and Business Support Package, which includes a Small Business Recovery Grant for those most affected by Covid-19 restrictions, such as food and beverage and hospitality enterprises.
They will receive a $1,000 payout per local employee, up to a cap of $10,000 per firm.
A $560 million Household Support Package will also help Singaporeans with utility bills, education and daily essentials. It includes GST Voucher-U-Save rebates for the rest of the year, and additional $100 in Community Development Council Vouchers for all.
To plan ahead for a post-pandemic world and the opportunities it offers, Singapore will also commit an additional $200 million over the next few years to schemes to build digital capabilities in business and workers; and around $600 million to expand the Productivity Solutions Grant for SMEs to implement automation efforts.
New initiatives such as the Singapore Global Enterprises and Singapore Global Executive Programme will help larger firms grow overseas and attract the next generation of leaders.
At the same time, to ensure that incoming employment pass holders are comparable in quality to the top third of the local professionals, managers, executives and technicians (PMET) workforce, from September this year their qualifying salary threshold will be raised from $4,500 to $5,000; and from $5,000 to $5,500 for the financial service sector.
Environmental sustainability was also on the Budget agenda, with Mr Wong revealing that Singapore will now target net zero emissions by or around 2050.
Its previous aim was to halve emissions by then, with a view to achieving net-zero "as soon as viable in the second half of the century".
To match these new ambitions, taxes on carbon emissions will be raised from the current $5 per tonne to $25 in 2024 and 2025, and $45 in 2026 and 2027, with a view to reaching $50 to $80 by 2030.
Another key plank of this year's Budget was renewing and strengthening Singapore's social compact.
For lower-wage workers, a new Progressive Wage Credit Scheme will see the Government helping businesses by co-funding wage increases between 2022 and 2026, for employees earning up to $2,500. For those earning above $2,500 and up to $3,000, co-funding support will be offered until 2024.
From Jan 1, 2023, the qualifying income cap for the Workfare Income Supplement will be raised from $2,300 to $2,500.
Mr Wong also sketched out other efforts in boosting retirement adequacy, investing in children, integrating social service delivery, preparing for future healthcare needs, and better supporting the charities sector; with more details to come when MPs debate the Budget and spending plans of various ministries in the coming weeks.
Prime Minister Lee Hsien Loong said in a Facebook post that this Budget will lay the basis for “sound and sustainable government finances, post-pandemic and beyond”.
“We are building a greener and more sustainable city, transforming our economy to create good jobs for Singaporeans, expanding our healthcare system for an ageing society, and strengthening social programmes so that no one is left behind,” he added.
This Budget is a first step in "realising our vision of a fairer, more sustainable, and more inclusive society", said Mr Wong.
"Looking back at what we have been through during these Covid-19 years, we have nothing to fear. We will always overcome. We will always prevail," he concluded.
"We will chart a new way forward together. We will see through the pandemic today, and build a better Singapore tomorrow."
Budget 2022 highlights: GST hike, higher income tax for top earners and CDC vouchers for all
By Hariz Baharudin, Assistant News Editor, The Straits Times, 18 Feb 2022
Finance Minister Lawrence Wong announced major tax changes and targeted help for workers, households and businesses in the Budget speech on Friday (Feb 18).
Here are some highlights from his speech:
1. GST hike
- The goods and service tax (GST) rate will increase from 7 per cent to 9 per cent in two stages - one percentage point each time on Jan 1, 2023 and Jan 1, 2024.
- The hike will bring in about 0.7 per cent of gross domestic product in revenue annually - about $3.5 billion - when the full hike is in place in 2024.
- GST will continue to be absorbed on publicly subsidised healthcare and education. - Town councils will be given an additional $15 million annually to absorb the additional GST payable on service and conservancy charges.
- Government fees and charges will not be increased for a year from Jan 1, 2023.
2. Cushioning the impact of GST hike
- The Government will top up $640 million to the $6 billion Assurance Package it has committed to cushion the effects of the tax increase.
- Every Singaporean aged 21 and above will receive cash payouts of $700 to $1,600 over the next five years.
- Cash payouts of $600 to $900 for eligible seniors aged 55 and above over three years from 2023 to 2025.
- Eligible HDB households will receive additional U-Save rebates totalling $330 to $570, depending on their flat type.
- All Singaporean children and seniors will receive MediSave top-ups worth $450 over the next three years.
- Households to receive a total of $400 Community Development Council (CDC) vouchers in 2023 and 2024
- GST Voucher (GSTV) scheme to be enhanced:
- Service and conservancy charges rebate will be made a permanent component.
- Assessable income threshold for GSTV-Cash will increase from $28,000 to $34,000.
- Increase in GSTV-Cash payouts - up to $500 for eligible Singaporeans
3. Carbon tax increase
- The carbon tax will be raised to $25 per tonne in 2024 and 2025 and $45 per tonne in 2026 and 2027, with a view to reaching $50 to $80 per tonne by 2030.
- The current tax of $5 per tonne of emissions will remain unchanged until 2023. Large emitters in Singapore will from 2024 be able to buy international carbon credits to reduce the carbon tax they have to pay here.
4. Rise in personal income tax rates for top earners
- Resident taxpayers' chargeable income in excess of $500,000 up to $1 million will be taxed at 23 per cent, while income in excess of $1 million will be taxed at 24 per cent.
- This is up from the current 22 per cent tax levied on income in excess of $320,000. Income in excess of $320,000 up to $500,000 will continue to be taxed at 22 per cent.
- This will take effect from the year of assessment 2024.
- Top 1.2 per cent of personal income taxpayers expected to be affected, and this move will raise $170 million of additional tax revenue per year.
5. Higher taxes on properties, luxury cars
- Property tax rates for non-owner-occupied residential properties - which include investment properties - will be increased to 12 per cent to 36 per cent. This compares with the current 10 per cent to 20 per cent tax levied on such properties.
- Property tax rates for owner-occupied homes for the portion of annual value in excess of $30,000 will also be raised, ranging from 6 per cent to 32 per cent. This compares with 4 per cent to 16 per cent for such homes today.
- New tier of additional registration fee (ARF) for cars at a rate of 220 per cent for the portion of open market value in excess of $80,000.
- This will apply to all cars registered with certificates of entitlement (COEs) obtained from the bidding exercise from next week onwards. For cars that do not need to bid for COEs, such as taxis, the new rates will apply from Saturday (Feb 19). The additional fees are expected to generate an additional $50 million in revenue per year.
6. More help for families, including more vouchers for daily expenses
- A $560 million Household Support Package will be rolled out for families.
- All households will receive $100 worth of CDC vouchers this year that can be used at participating heartland shops and hawker centres.
- About 950,000 households will get double GST Voucher - U-Save rebates (up to $285 more) for April to December.
- About 790,000 Singaporeans below the age of 21 will get a $200 top-up to their Child Development Account, Edusave account, or Post-Secondary Education Account.
7. Greater support for businesses recovering from COVID-19
- New Small Business Recovery Grant: SMEs badly hit by Covid-19 will get $1,000 per local employee, up to $10,000 per company.
- $1,000 payout to groups which do not hire local employees such as Singapore Food Agency-licensed hawkers, market and coffeeshop stallholders.
- The Jobs Growth Incentive (JGI) will be extended to September, with stepped-down support rates
- Targeted assistance for aviation sector.
8. Uplifting lower-wage workers
- Government to co-fund wage increases of lower-wage workers between 2022 and 2026 by up to 50 per cent in the first two years for some workers.
- Workfare Income Supplement scheme will be enhanced, including higher maximum annual payouts of $2,100 to $4,200, increasing the qualifying income cap from $2,300 to $2,500, and extending the scheme to younger workers aged 30 to 34.
- The Progressive Wage Credit Scheme and enhanced Workfare are expected to cost the Government around $9 billion in total over the next five years.
9. CPF basic retirement sum to be raised
- The Central Provident Fund (CPF) Basic Retirement Sum will be raised by 3.5 per cent a year for the next five cohorts of CPF members turning 55 from 2023 to 2027.
- CPF contribution rates for senior workers will be increased between 1.5 and 2 percentage points.
10. Foreign worker policy revisions
- Employment Pass (EP) minimum qualifying salary will be raised from $4,500 to $5,000
- For the financial service sector, this will be raised from $5,000 to $5,500. These changes will apply to new EP applications from Sept 1, and to renewal applications from Sept 1 in 2023.
- The minimum qualifying salary for foreign workers on S Passes will be raised to $3,000 and to $3,500 in financial sectors.
- Lower Dependency Ratio Ceiling from 1.7 to 1.5 from Jan 1, 2024.
11. Singapore's fiscal outlook
- The Budget will continue to be expansionary for financial year 2022 to support the economy, with an expected deficit of $3 billion, or 0.5 per cent of Singapore's gross domestic product (GDP). This is smaller than FY2021's overall deficit of $5 billion, or 0.9 per cent of GDP.
- An increase of $4 billion in total expenditure is expected in the coming year, as Singapore spends more on the areas of health, defence and manpower.
- The total expected draw on past reserves over FY2020 to FY2022 is up to $42.9 billion.
Singapore to raise GST from 7% to 9% in two stages in 2023 and 2024
By Goh Yan Han, Political Correspondent, The Straits Times, 18 Feb 2022
The goods and services tax (GST) rate will increase from 7 to 9 per cent in two stages - one percentage point each time on Jan 1, 2023 and Jan 1, 2024.
The $6 billion Assurance Package earlier announced in 2020 to cushion the impact of the GST hike will also receive a boost of $640 million, totalling $6.6 billion, said Finance Minister Lawrence Wong on Friday (Feb 18) in his maiden Budget speech.
The delayed GST hike will bring in about 0.7 per cent of gross domestic product in revenue annually - about $3.5 billion - when the full hike is in place in 2024. It will go towards supporting healthcare expenditure and to take care of senior citizens while other areas of social spending rise as well.
GST revenue by itself will not be sufficient to cover additional healthcare spending, said Mr Wong. That is why Singapore needs not only the GST increase but also the changes to personal income tax, property tax and vehicle tax which he had announced earlier in his speech, he added.
Where the timing of GST is concerned, Mr Wong said he had carefully considered the overall situation - the ongoing pandemic, the state of the economy and the outlook for inflation.
"Our revenue needs are pressing. But I also understand the concerns that Singaporeans have about the GST increase taking place at the same time as rising prices," he said.
That is why the GST increase will be delayed to 2023 and the hike will be staggered over two steps - first, from 7 per cent to 8 per cent on Jan 1, 2023; followed by 8 per cent to 9 per cent on Jan 1, 2024.
GST will continue to be absorbed on publicly subsidised healthcare and education, said Mr Wong.
"I want to assure all Singaporeans that we will continue to implement the GST in our unique Singaporean way, with features and schemes that support the less well-off," he added.
Singapore first announced a planned 2 percentage point GST increase from 7 per cent to 9 per cent in 2018, but it was delayed due to the Covid-19 pandemic.
On Friday, Mr Wong said he will also provide town councils with an additional $15 million annually to absorb the additional GST payable on service and conservancy charges.
Government fees and charges will also not be increased for a year from Jan 1, 2023, he said.
This will apply to licence fees - such as driving licences - as well as fees charged by Government agencies for the provision of services. This includes school fees such as Institute of Technical Education and polytechnic fees, and charges in public carparks, he said.
It does not apply to fees determined by non-Government entities such as universities or electronic road pricing charges.
To address concerns that businesses could use GST as a cover to raise prices, a Committee Against Profiteering, chaired by Minister of State for Trade and Industry Low Yen Ling, will be formed.
The enhanced Assurance Package - with five components - will distribute payouts to Singaporeans over the next five years.
For a majority of Singaporean households, the offsets from the package will cover at least five years of additional GST expenses, said Mr Wong.
For lower-income households who receive much more, the offsets will cover about 10 years’ worth, he added.
The package will include cash payouts, additional U-Save rebates for utilities and MediSave top-ups, among others.
Budget 2022: What help will Singaporeans get to offset the GST hike?
By Linette Lai, Health Correspondent, The Straits Times, 18 Feb 2022
Between 2023 and 2024, Singapore's goods and services tax (GST) will go up from 7 per cent to 9 per cent.
But two programmes have been put in place to cushion the blow for ordinary Singaporeans. The first is a $6.6 billion Assurance Package, announced by then Finance Minister Heng Swee Keat in 2020 and topped up by Finance Minister Lawrence Wong on Friday (Feb 18).
The second is the introduction of a beefed-up permanent GST Voucher scheme, which will support lower-income households even after payouts from the Assurance Package end.
These are the key changes under both packages.
1. Adult Singaporeans to get total cash payouts of $700 to $1,600
About 2.8 million Singaporeans aged 21 and above will get cash payouts over five years under the Assurance Package. The first payment will be made in December, with the exact amount dependent on a person's income and property ownership status.
Eligible seniors will also get an additional $600 to $900 in GST Vouchers over the next three years.
2. GST Voucher U-Save utilities rebates of $330 to $570
As part of the Assurance Package, around 950,000 Singaporean households will get extra GST Voucher U-Save utilities rebates for the next four years.
These rebates apply to people living in Housing Board flats, and will be credited from January next year along with the regular GST Voucher U-Save rebate.
3. Higher GST Voucher cash payouts, more to qualify
When payouts from the Assurance Package end in 2026, the beefed-up GST Voucher scheme will continue to offset expenses for lower-income and retiree households.
GST cash voucher payouts under the scheme will go up to either $250 or $500, with the exact amount depending on the value of one's home. The current payout is either $150 or $300, and is distributed to Singaporeans with annual income of $28,000 and below.
The assessable income threshold for GST Vouchers will also go up from $28,000 to $34,000, meaning that more Singaporeans will qualify for the scheme. About 1.5 million adult Singaporeans will receive this enhanced payout.
4. Service and conservancy charges (S&CC) rebate to become permanent part of GST Voucher scheme
Some 950,000 Singaporean households will get rebates to offset between 1.5 and 3.5 months of S&CC charges.
The rebates apply to Singaporean households living in HDB flats, and will be paid out in four tranches starting in April.
5. Assurance Package to offset at least five years of additional GST expenses for most Singaporean households.
Mr Wong reiterated his predecessor's promise that the $6.6 billion Assurance Package will offset at least five years of additional GST expenses for most Singaporean households.
For lower-income households, the offsets will amount to around 10 years of such expenses, while seniors will get even more support, he said.
For instance, an elderly couple living in a three-room HDB flat can receive about $6,800 over five years, or more than 30 times the additional GST they are likely to incur each year.
Budget 2022: $6 billion draw on past reserves to pay for COVID-19 public health expenditure
By Tham Yuen-C, Senior Political Correspondent, The Straits Times, 18 Feb 2022
To make sure that Singapore can respond nimbly and confidently to the evolving Covid-19 situation, the Government will dip into the country's past savings to the tune of $6 billion this year to pay for related public health expenditure, said Finance Minister Lawrence Wong on Friday (Feb 18).
This brings to $42.9 billion the total expected draw on the past reserves for the three financial years of 2020 to 2022, less than the initial sum of $52 billion that the Government projected it would need at the onset of the pandemic.
Delivering the Budget statement in Parliament, Mr Wong said President Halimah Yacob has given her in-principle support for the $6 billion draw.
Of this sum, $3.7 billion will go towards Covid-19 testing, clinical management and contact tracing, $1.2 billion towards vaccination and therapeutics, and $1.1 billion towards isolation facilities, border management and safe distancing.
The Ministry of Finance (MOF) said in a statement that these are temporary and extraordinary measures required to maintain a multi-layered public health defence in the near term.
Mr Wong, speaking on the cumulative draw on the reserves, noted that for both the 2020 and 2021 financial years, the Government ended up needing less than the original amount of reserves it was looking to draw.
"It reflects our prudence in the use of past reserves," he said.
In FY2020, the Government had said it would draw up to $52 billion to pay for measures needed to protect lives and livelihoods as economies around the world were battered.
But it now expects to use $31.9 billion for that financial year, said Mr Wong.
This is because Singapore's "swift and decisive response" to the pandemic averted worse public health outcomes, and the stronger-than-expected rebound in the economy and businesses also meant that measures such as loan loss provisions were not used, added Mr Wong.
MOF said Singapore was able to avoid severe public health outcomes due to safe management measures and the cooperation of Singaporeans.
It added that the sizeable fiscal support for businesses had helped the economy bounce back and kept a lid on non-performing loans.
Likewise, in FY2021, the Government had planned to draw $11 billion to pay for the Covid-19 Resilience Package, but now expects to draw just $5 billion, said Mr Wong.
He said the smaller amount needed is mainly due to a reduced expenditure of $10 billion for the Covid-19 Resilience Package, as well as ministries not needing to spend as much because of projects being delayed by Covid-19.
The Government had also received extra revenue from one-off revenue upsides, including from vehicle quota premiums and stamp duties, he added.
In addition, said Mr Wong, the Government had tapped existing resources to provide short-term relief when restrictions had to be tightened periodically last year to bring down the number of Covid-19 cases.
For instance, the $2 billion worth of economic relief measures introduced during the periods of heightened alert last year had been covered through a reallocation of funds, while the $1.4 billion worth of support measures introduced during the stabilisation phase had come from an advance from the Contingencies Fund.
Mr Wong added that he will replace the advances from the Contingencies Fund, set up for urgent, unforeseen expenditures, through the Supplementary Budget for FY2021.
With spending needs expected to grow as Singapore tackles structural shifts and invests more to deliver on longer-term priorities laid out in Budget 2022, the Government will continue to manage expenditure growth, in addition to raising revenue, said Mr Wong.
Since FY2017, the Government has implemented a 2 per cent cut in the budgets of all ministries and organs of state, and this will be increased by 1 per cent from FY2023, added Mr Wong.
The cuts have ensured that "we spend judiciously and achieve good value-for-money outcomes", said Mr Wong, adding that funds from the new adjustment will be channelled to new priorities.
Budget 2022: $3 billion deficit expected in FY2022 as Budget remains expansionary
By Lim Min Zhang, Assistant News Editor, The Straits Times, 18 Feb 2022
The Budget is about using collective resources to build the country and improve the lives of Singaporeans, said Finance Minister Lawrence Wong in his Budget speech on Friday (Feb 18).
Mr Wong said: "The Budget supports spending on programmes for all in areas such as security, housing, education and health. Every dollar collected flows back to our taxpayers in one way or another."
These include providing Silver Support payments to lower-income seniors and Workfare payouts to lower-income workers, as well as health and childcare subsidies and the education that every child receives, he said.
The Budget will continue to be expansionary for financial year 2022 to support the economy, with an expected deficit of $3 billion, or 0.5 per cent of Singapore's gross domestic product.
This is smaller than FY2021's overall deficit of $5 billion, or 0.9 per cent of GDP.
The main items in this year's Budget include:
- A $500 million Jobs and Businesses Support Package to provide targeted help for workers and firms facing slower recoveries, such as in the tourism, food and beverage, retail and sports industries.
- A $560 million Household Support package to help Singapore families manage cost of living pressures, with more support for utilities and education-related expenses, as well as another set of $100 Community Development Council vouchers for households.
- The earlier-announced $6 billion Assurance Package to cushion the impact of the goods and services tax (GST) hike will receive a $640 million top-up.
- A new Progressive Wage Credit Scheme, which co-funds wage increases of lower-wage workers between 2022 and 2026, will receive an initial injection of $2 billion. The scheme complements the extension of the Progressive Wage Model to more sectors over the next two years, such as retail, food services and waste management.
Expected revenue and expenditure
An increase of $4 billion in total expenditure is expected in the coming year as Singapore spends more in the areas of health, defence and manpower.
Estimated ministry spending for FY2022 is $102.4 billion, up from the revised FY2021 estimate of $98.4 billion.
The Ministry of Manpower has an estimated expenditure increase of $2 billion due to the extended qualifying window of the Jobs Growth Incentive scheme to support hiring, and other Covid-19-related spending such as on recovery facilities for migrant workers.
The Ministry of Defence is estimated to spend $1 billion more in the coming financial year, with the resumption of activities such as training and exercises that were previously affected by the pandemic.
The ministry is receiving an allocation of 16 per cent of the Budget, behind the 18.8 per cent given to the Ministry of Health (MOH).
Meanwhile, the MOH is projected to spend more on public health institutions, community hospitals and voluntary welfare organisations in aged care and long-term care sectors.
Ramped-up progress for development projects such as the Woodlands Health Campus, Singapore General Hospital (SGH) Emergency Medicine Building and SGH Elective Care Centre is also expected.
However, revenue for 2022 is projected to be $81.75 billion - $1.39 billion more than the previous year's revised estimates.
Higher collections from corporate and personal income taxes, the GST and vehicle quota premiums are estimated for FY2022, compared with revised 2021 figures.
The Net Investment Returns Contribution (NIRC) for FY2022 is expected to be $21.56 billion - a 6 per cent increase.
Revised position for FY2021
The overall Budget deficit for FY2021 was pared down to $5 billion, from $11 billion as previously estimated.
The latest figure takes into account capitalisation of nationally significant infrastructure of $0.66 billion, after the passing of the Significant Infrastructure Government Loan Act in May last year to finance major, long-term infrastructure investments.
Revised operating revenue went up to $80.4 billion, up $3.8 billion from the $76.6 billion estimated previously.
The increase is mainly due to higher collections of personal income tax from higher-than-expected wage growth, stamp duty and vehicle quota premiums.
The revised figure for stamp duty collections is $6.5 billion, which is $2.2 billion higher than the budgeted estimate, as the property market was more buoyant than expected.
Vehicle quota premiums collected in FY2021 were estimated to total $3.2 billion, $0.9 billion higher than previously estimated.
Ministry expenditure for FY2021 was $98.4 billion - $3.9 billion lower than estimated previously.
Two key reasons for the drop were the lower spending needs for financing schemes in relation to Covid-19 as the economy continues to recover, and lower development expenditure due to construction delays arising from the pandemic.
At $20.3 billion, the NIRC last year continued to be the top contributor to government coffers, ahead of corporate and personal income taxes, and GST.
Since 2016, the returns on Singapore's invested reserves have been the single largest source of government revenue.
The NIRC comprises up to 50 per cent of the Net Investment Returns on net assets invested by sovereign wealth fund GIC, the Monetary Authority of Singapore and Singapore's investment company Temasek, and up to 50 per cent of the Net Investment Income derived from past reserves from the remaining assets.
Related
No comments:
Post a Comment