10 highlights of Singapore Budget 2021
Tuesday, 16 Feb 2021
7:33 PM MYT
SINGAPORE (The Straits Times/ANN): A range of initiatives, including vouchers for families and extended wage subsidies for sectors hardest hit by the Covid-19 pandemic, were announced by Deputy Prime Minister Heng Swee Keat on Tuesday (Feb 16).
Households will get more rebates and vouchers to spend in the heartland, while lifelines for firms in sectors like aviation and tourism will be extended for a few more months.
Here are 10 highlights:
1. More help for families, including $100 vouchers
A S$900 million Household Support Package will be rolled out for families amid the ongoing economic uncertainty.
The package includes vouchers that each household can use to defray expenses and support local businesses, as well as service and conservancy charge (S&CC) rebates and goods and services tax (GST) vouchers.
About 1.3 million households will receive $100 Community Development Council (CDC) vouchers that can be used at participating heartland shops and hawker centres.
Eligible Singaporean households in Housing Board flats will also receive rebates to offset between 1½ and 3½ months of S&CC over the year.
About 1.4 million lower-income Singaporeans will get an additional GST Voucher - Cash Special Payment of $200 in June, on top of the regular GST Voucher cash payout.
About 950,000 households will also get additional utilities rebates of between $120 and $200 under the GST Voucher -- U-Save Special Payment that will be credited in April and July.
This means they will receive 1½ times their usual annual rebate.
Singaporean children below the age of 21 will get a $200 top-up to their Child Development Account, Edusave account, or Post-Secondary Education Account. This will benefit about 780,000 children.
2. GST hike between 2022 and 2025, 'sooner rather than later'
The increase in GST rate by two percentage points from 7 per cent to 9 per cent will not be implemented this year - as announced in last year's Budget.
However, it will take place between next year and 2025, and "sooner rather than later", depending on the economic outlook, said Heng.
Singapore will not be able to meet its rising recurrent spending needs, especially in healthcare, without the GST hike, he added.
The Government previously announced a $6 billion Assurance Package to cushion the impact of the hike when it takes place.
3. Start paying GST for imported low-value goods bought online
Low-value goods bought online and imported by air or post will be subject to GST from Jan 1, 2023.
GST will also be extended to imported non-digital services for consumers, such as those involving live interactions with overseas providers of fitness training, counselling and tele-medicine.
This will help to level the playing field for local businesses to compete effectively, said Heng.
Low-value goods that are worth $400 or less and imported via air or post are currently not subject to GST to facilitate clearance at the border, but the tax is paid on such goods bought here.
All goods imported via land or sea are already taxed, regardless of value.
Overseas suppliers of goods and services will be subject to the same GST treatment as local suppliers, said Heng.
4. Pay more for petrol
Motorists now have to pay more at the pump amid Singapore's drive to be a car-lite society.
The duty for premium grade (98-octane and above) petrol will be raised 15 cents per litre to 79 cents a litre, while that for intermediate grade (92-octane and 95-octane) petrol will be raised 10 cents a litre to 66 cents a litre.
There will be rebates to ease the transition for Singaporeans, especially those who drive for a living.
Taxi and private-hire drivers will be given a 15 per cent road tax rebate for a year, and $360 of additional petrol duty rebate over four months. Cars using petrol will be given a one-year tax rebate of 15 per cent.
All road tax changes will be applicable for a one-year period from Aug 1, 2021 to July 31, 2022.
5. JSS to be extended for sectors hardest hit by Covid-19
Wage subsidies under the Jobs Support Scheme (JSS) will be extended by up to a further six months to help businesses that remain badly hit by the Covid-19 pandemic to retain workers.
The subsidies -- which range from 10 per cent to 30 per cent -- will cover wages paid from April to September for firms in sectors worst hit by the crisis: aviation, aerospace and tourism.
For firms in other industries that have been hit hard, including food services, retail, marine and offshore, as well as arts and entertainment, the extension will be from April to June.
To facilitate workers moving to jobs in growth areas, specific schemes within the SGUnited Jobs and Skills Package will be extended.
The Wage Credit Scheme will also be extended by a year, at a co-funding level of 15 per cent, to further support wage increments so companies can retain and attract local workers.
The salaries of nurses and other healthcare workers, such as support care staff, will also be enhanced.
6. S Pass quota for foreign workers in manufacturing to be cut to 15% by 2023
From Jan 1 next year, foreign workers on S Passes can make up only up to 18 per cent of the workforce at firms in the manufacturing sector.
This quota will be further cut to 15 per cent from Jan 1, 2023. It is currently 20 per cent.
The overall quota -- comprising workers on work permits and S Passes -- for manufacturing will remain at 60 per cent.
7. $11 billion Covid-19 Resilience Package
An $11 billion Covid-19 Resilience Package will be set aside to enhance Singapore’s recovery from the Covid-19 pandemic. Of this, $4.8 billion will go towards safeguarding public health, including providing everyone who is eligible with free vaccination against the virus.
The Government aims to fund the Covid-19 Resilience Package by drawing on past reserves.
For a second year in a row, Singapore will dip into its past savings to pay for measures needed to fight Covid-19, with a draw of $1.7 billion on the reserves.
The amount will be combined with $9.3 billion that was drawn last year but not used.
Altogether, the expected draw on the reserves over the two financial years will come up to a total of $53.7 billion.
8. Cheaper electric vehicles, more charging points
Singapore will more than double its targeted number of charging points for electric vehicles in the next decade.
It will deploy 60,000 charging points at public carparks and private premises by 2030, up from the previous target of 28,000.
Heng on Tuesday said $30 million will be set aside over the next five years for initiatives related to electric vehicles, like measures to increase the number of chargers at private properties.
To further encourage the early adoption of electric cars, there will also be a lower cost difference between electric cars and internal combustion engine (ICE) cars.
The minimum Additional Registration Fee (ARF) for electric cars will be lowered to zero from January 2022 to December 2023.
Currently, all car buyers have to pay at least $5,000 in ARF, regardless of the tax rebate a car is entitled to.
9. New bonds to distribute fiscal responsibility
The Government will issue new bonds totalling up to $90 billion to finance long-term infrastructure, such as new MRT lines, under a law to be tabled in Parliament later this year.
There will be a limit of $90 billion for borrowing under the proposed Significant Infrastructure Government Loan Act (Singa). This is based on the expected pipeline of major, long-term infrastructure projects over the next 15 years.
"This approach will allow us to spread out the lumpy costs of such infrastructure investments more equitably across generations," said Heng.
They will also allow Singapore to benefit from the the current low interest rate environment.
10. $870 million support for aviation sector
The aviation sector will get additional support and an extension in cost relief that will cost the Government $870 million this year.
Heng expects the sector to use the travel lull to sustain and upgrade its capabilities and prepare for recovery.
Taxi and private-hire car drivers will be supported by the Covid-19 Driver Relief Fund which was previously announced. The Government has set aside $133 million for this fund.
The Arts and Culture Resilience Package and Sports Resilience Package will be extended this year to support businesses and self-employed people in these sectors. - The Straits Times/Asia News Network
10 highlights of Singapore Budget 2021