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Accountants & Business Advisors
Serving you
worldwide
This Singapore Budget Synopsis 2018 is published for use by clients and staff of Paul Wan & Co. as a general guide and is available to others upon request. While every care has been taken in the preparation of the information contained therein, no liability is accepted by the firm for any errors or omissions. Soft copies of this Singapore Budget Synopsis 2018 are available for downloading at our website: http://www.pwco.com.sg
Paul Wan & Co., Singapore Budget Synopsis 2018
SINGAPORE BUDGET SYNOPSIS 2018
CONTENTS PAGE
THE BUDGET IN SUMMARY
CORPORATE AND BUSINESSES
1. Corporate Income Tax Rate 1
2. Enhancing And Extending Corporate Income Tax (CIT) Rebate 1
3. Enhancing Tax Deduction For Qualifying Expenditure On Qualifying 1
Research And Development (R&D) Projects Performed In Singapore
4. Enhancing Tax Deduction For Costs On Protecting Intellectual Property (IP) 1
5. Enhancing Tax Deduction For Costs On Intellectual Property In-Licensing 1
6. Enhancing Of Double Tax Deduction (DTD) For Internationalisation Scheme 1
7. Adjustment To The Start-Up Tax Exemption (SUTE) Scheme 2
8. Adjustment To The Partial Tax Exemption (PTE) Scheme 2
9. Extending Of Wage Credit Scheme (WCS) 2
10. Extending Tax Deduction For Qualifying Donations 3
11. Extending Business And IPC Partnership Scheme (BIPS) 3
12. Extending Of Investment Allowance (IA) Scheme 3
13. Introducing Tax Framework For Singapore Variable Capital Companies (S- 4
VACCs)
14. Enhancing Of Enhanced-Tier Fund Scheme Under Section 13X Of The 4
S.I.T.A.
15. Extending Of Tax Incentive Scheme For Approved Special Purpose Vehicle 4
(ASPV)
16. Extending Of Tax Transparency Treatment For Singapore-Listed Real Estate 4
Investment Trusts (S-REITS) To Singapore-Listed Real Estate Investment
Trusts Exchange-Traded Funds (REITS ETFS)
Cont’dPaul Wan & Co., Singapore Budget Synopsis 2018
SINGAPORE BUDGET SYNOPSIS 2018
CONTENTS (Cont’d) PAGE
17. Rationalising Withholding Tax (WHT) Exemptions For The Financial Sector 5
18. Extending Of Qualifying Debt Securities (QDS) Incentive Scheme And Allow 6
Qualifying Debt Securities Plus (QDS+) Incentive Scheme To Lapse
19. Extending And Enhancing Of Financial Sector Incentive (FSI) Scheme 6
20. Extending Of Tax Deduction For Banks (Including Merchant Banks) And 6
Qualifying Finance Companies
21. Extending Of Insurance Business Development – Insurance Broking 7
Business (IBD-IBB) Scheme And Allow The Insurance Business
Development – Specialised Insurance Broking Business (IBD-SIBB) Scheme
To Lapse
22. Extending Of Tax Exemption From Trading In Singapore Government 7
Securities (SGS)
23. Withholding Tax (WHT) Exemption On Container Lease Payments Made To 7
Non-Resident Lessors
24. Productivity Solutions Grant (PSG) 7
25. Enterprise Development Grant (EDG) 8
26. PACT 8
27. Infrastructure Office 8
28. Tech Skills Accelerator (TeSA) 8
29. Career Trial 8
GOODS AND SERVICES TAX (GST)
1. GST Rate 9
2. Introducing GST On Imported Services 9
INDIVIDUALS AND HOUSEHOLDS
1. Individual Income Tax Rate 11
Cont’dPaul Wan & Co., Singapore Budget Synopsis 2018
SINGAPORE BUDGET SYNOPSIS 2018
CONTENTS (Cont’d) PAGE
2. Increasing Annual Edusave Contributions 11
3. Edusave Merit Bursary 11
4. Enhancing Proximity Housing Grant 12
5. Foreign Domestic Worker (FDW) Levy 12
6. SG Bonus 13
7. GST Voucher – Cash 13
8. GST Voucher – Utilities-Save (U-Save) 14
9. GST Voucher – Medisave For Older Singaporeans 14
10. Service And Conservancy Charges (S&CC) Rebate 15
11. Community Networks For Seniors (CNS) 15
12. Integrating Health And Social Support For Seniors 15
OTHERS
1. Measures To Encourage Reduction Of Greenhouse Gas Emissions 17
2. Increasing In Stamp Duty On Residential Property 18
3. Increasing In Excise Duties For Tobacco Products 18
*****************************************************************************
Designed and Compiled by Paul Wan & Co., Singapore Tax TeamPaul Wan & Co., Singapore Budget Synopsis 2018
This page has been intentionally left blank.Paul Wan & Co., Singapore Budget Synopsis 2018
THE BUDGET IN SUMMARY
On 19 February 2018, the Minister for Finance, Mr Heng Swee Keat delivered
the Singapore Budget 2018 in Parliament. This year’s budget unveiled plenty
of measures to help companies, families and individuals meet their immediate
and long-term needs.
To help prepare for the future and meet the inevitable rise in public
expenditure on healthcare due to our ageing population, upgrading of the
country’s infrastructure and investing in education and security, the Minister
has indicated that there is a need to increase the GST rate from 7% to 9%
progressively between year 2021 and 2025.
For our aspiration to build a smart, green and livable city, the Government
would set aside funds to make investments for sustainability and imposed
Carbon tax from year 2019 on companies producing high greenhouse gas
emissions.
To redefine, reinvent and reimagine Singapore’s future in a well-positioned for
sustained growth, the Finance Minister has unveiled the following key
measures:-
1. Corporate income tax rebate and tax exemptions;
2. Enhancing R & D expenditures and IPs licensing and registration costs;
3. Enhancing tax incentives such as grants and co-funding schemes to
encourage companies to innovate further, internationalisation and raise
productivity;
4. Enhancing Edusave schemes and programmes; and
5. Upgrading skills of workers through Skillsfuture training, Capability transfer
programme, Career trial programme, Asian Leadership programme, etc.
Overall, the Finance Minister has indicated that there will be a slight deficit of
S$0.6 billion, or 0.1% of GDP for 2018.
*********************Paul Wan & Co., Singapore Budget Synopsis 2018
This page has been intentionally left blank.Paul Wan & Co., Singapore Budget Synopsis 2018
CORPORATE AND BUSINESSES
1. CORPORATE INCOME TAX RATE
The existing corporate income tax rate remained at a flat rate of 17%, unchanged since
Year of Assessment 2010, regardless of whether it is a local or foreign company.
2. ENHANCING AND EXTENDING CORPORATE INCOME TAX (CIT) REBATE
To ease business costs and support restructuring by companies, the CIT rebate will be
enhanced to 40% of tax payable, with enhanced cap at S$15,000/- for Year of
Assessment (YA) 2018. The rebate will also be extended for another year to YA 2019, at
the rate of 20% of tax payable, cap at S$10,000/-.
3. ENHANCING TAX DEDUCTION FOR QUALIFYING EXPENDITURE ON QUALIFYING
RESEARCH AND DEVELOPMENT (R&D) PROJECTS PERFORMED IN SINGAPORE
To further encourage and support businesses in creating their own innovations, the tax
deduction that businesses can claim will increase from 150% to 250% on qualifying staff
costs and consumables incurred on qualifying R&D projects performed in Singapore
from YA 2019 to YA 2025. Tax deduction for other qualifying expenditure will remain at
100%.
4. ENHANCING TAX DEDUCTION FOR COSTS ON PROTECTING INTELLECTUAL
PROPERTY (IP)
To encourage smaller businesses to register and protect their IP, this scheme will be
extended till YA 2025 and tax deduction is increased from 100% to 200% for the first
S$100,000/- of qualifying IP registration costs incurred for each YA from YA 2019 to YA
2025.
5. ENHANCING TAX DEDUCTION FOR COSTS ON INTELLECTUAL PROPERTY IN-
LICENSING
To help smaller businesses to buy and use new solutions, the tax deduction on qualifying
IP in-licensing costs will be enhanced from 100% to 200% for the first S$100,000/- of
qualifying IP in-licensing costs incurred for each YA from YA 2019 to YA 2025.
6. ENHANCING OF DOUBLE TAX DEDUCTION (DTD) FOR INTERNATIONALISATION
SCHEME
To further encourage SMEs to venture abroad, and reduce administrative burden on
businesses, businesses may claim up to 200% tax deduction on qualifying expenditure
incurred on qualifying market expansion and investment development activities.
-1-Paul Wan & Co., Singapore Budget Synopsis 2018
The S$100,000/- expenditure cap for claims on the following four activities, without the
need for approval from International Enterprise (IE) Singapore or Singapore Tourism
Board (STB) will be increased to S$150,000/- per YA for YA 2019 onwards:-
(a) Overseas business development trips / missions;
(b) Overseas investment study trips / missions;
(c) Participation in overseas trade fairs; and
(d) Participation in approval local trade fairs.
For expenditure incurred in excess of S$150,000/- or expenditure incurred other than the
above four activities, approval on a case-by-case from IE Singapore or STB will continue
to be required.
Further details will be released by IE Singapore and STB by April 2018.
7. ADJUSTMENT TO THE START-UP TAX EXEMPTION (SUTE) SCHEME
With effect from YA 2020, for the first 3 YAs, new companies will enjoy tax exemption at
the following new rate:-
Tax exemption
Normal chargeable income * Current YA 2020 onwards
First S$100,000/- 100% 75%
Next S$100,000/- 50% 50%
Next S$100,000/- 50% -
* Normal chargeable income refers to chargeable income that is taxed at the prevailing
corporate income tax rate.
8. ADJUSTMENT TO THE PARTIAL TAX EXEMPTION (PTE) SCHEME
With effect from YA 2020, under the PTE scheme, all companies (excluding those that
qualify for the SUTE scheme) and bodies of persons will enjoy tax exemption at the
following new rate:-
Tax exemption
Normal chargeable income * Current YA 2020 onwards
First S$10,000/- 75% 75%
Next S$190,000/- 50% 50%
Next S$100,000/- 50% -
* Normal chargeable income refers to chargeable income that is taxed at the prevailing
corporate income tax rate.
9. EXTENDING OF WAGE CREDIT SCHEME (WCS)
The WCS will be extended for three more years from 2018 to 2020. Government co-
funding of qualifying wage increases will be 20% in 2018, 15% in 2019 and 10% in 2020.
Wage increases given in 2017, 2018 and 2019 which are sustained in subsequent years
of the scheme, will also be supported.
-2-Paul Wan & Co., Singapore Budget Synopsis 2018
10. EXTENDING TAX DEDUCTION FOR QUALIFYING DONATIONS
To continue encouraging businesses/Singaporeans to give back to community, the 250%
tax deduction will be extended for qualifying donations made on or before 31 December
2021 to Institutions of a Public Character (IPCs) and other qualifying recipients.
The following table shows the eligibility criteria:-
Donation Scheme Eligible Recipient Eligible Donor
Cash donations Any IPC and the All donors
Singapore Government
Gift of shares listed on the Any IPC Individual donors only
Singapore Exchange (SGX)
or of units in unit trusts
traded in Singapore or listed
on the SGX
Gifts of artefacts Approved museums All donors
(approval by the National
Heritage Board (NHB))
Donation of public sculptures Approved recipients All donors
(approval by the NHB)
Gifts of parcels of land or Any IPC All donors
buildings
11. EXTENDING BUSINESS AND IPC PARTNERSHIP SCHEME (BIPS)
In 2016, businesses that support their staff to volunteer and provide services to IPCs
receive a 250% tax deduction on associated costs incurred. To continue encouraging
employee volunteerism through business, this scheme will be extended for another three
years, until 31 December 2021.
In addition, MOF and IRAS will review the administrative processes of BIPS and details
of any changes will be announced in the second half of 2018.
12. EXTENDING OF INVESTMENT ALLOWANCE (IA) SCHEME
To strengthen Singapore’s position as a leading digital connectivity hub, IA scheme will
be extended to include capital expenditure on productive equipment incurred between 20
February 2018 and 31 December 2023, on newly-constructed strategic submarine cable
systems landing in Singapore subject to all the existing qualifying conditions, except for
the following which will be permitted:-
(a) The submarine cable systems can be used outside Singapore; and
(b) The submarine cable systems, on which IA has been granted, can be leased out
under the indefeasible rights of use arrangements.
Further details will be released by MAS in due course.
-3-Paul Wan & Co., Singapore Budget Synopsis 2018
13. INTRODUCING TAX FRAMEWORK FOR SINGAPORE VARIABLE CAPITAL
COMPANIES (S-VACCs)
A tax framework for S-VACC will be introduced to complement the S-VACC regulatory
framework:-
(a) An S-VACC will be treated as a company and a single entity for tax purposes;
(b) Tax exemption under Sections 13R and 13X of the SITA will be extended to S-
VACCs;
(c) 10% concessionary tax rate under the Fund managers approved under the Financial
Sector Incentive – Fund Management (“FSI-FM”) scheme will be extended to
approved fund managers managing an incentivised S-VACC; and
(d) The existing GST remission, which allows funds structured as companies as well as
trusts and limited partnerships, to claim GST at a fixed recovery rate, will be
extended to incentivised S-VACCs.
Further details will be released by MAS by October 2018.
14. ENHANCING OF ENHANCED-TIER FUND SCHEME UNDER SECTION 13X OF THE
S.I.T.A.
To cater for more diverse fund structures, tax exemption under the Enhanced-Tier Fund
Scheme will be extended to all fund vehicles constituted in all forms. Besides companies,
trusts and limited partnerships, all fund vehicles will be able to qualify for the Enhanced-
Tier Fund Scheme if they meet all qualifying conditions approved on or after 20 February
2018.
All other conditions of the scheme remain the same.
Further details will be released by MAS by May 2018.
15. EXTENDING OF TAX INCENTIVE SCHEME FOR APPROVED SPECIAL PURPOSE
VEHICLE (ASPV)
To continue developing the structured debt market, the ASPV scheme will be extended
till 31 December 2023. All other conditions of the scheme remain the same.
Further details will be released by MAS by May 2018.
16. EXTENDING OF TAX TRANSPARENCY TREATMENT FOR SINGAPORE-LISTED
REAL ESTATE INVESTMENT TRUSTS (S-REITS) TO SINGAPORE-LISTED REAL
ESTATE INVESTMENT TRUSTS EXCHANGE-TRADED FUNDS (REITS ETFS)
To have parity in tax treatments between investing in individual S-REIT and via REITs
ETF with investments in S-REITs, the following tax treatment will be accorded to REITs
ETFs:-
(a) Tax transparency treatment on the distributions received by REITs ETFs from S-
REITs which are made out of the latter’s specified income;
(b) Tax exemption on such REITs ETFs distributions received by individuals, excluding
individuals who derive any distribution:-
-4-Paul Wan & Co., Singapore Budget Synopsis 2018
(i) through a partnership in Singapore; or
(ii) from the carrying on of a trade, business or profession; and
(c) 10% concessionary tax rate on such REITs ETFs distributions received by qualifying
non-resident non-individuals.
Subject to conditions, the tax concessions for REITs ETFs will take effect on or after 1
July 2018, with a review date of 31 March 2020 which is the same as that for other tax
concessions for S-REITs. Application for the tax transparency treatment may be
submitted to IRAS on or after 1 April 2018.
Further details will be released by MAS and IRAS by March 2018.
17. RATIONALISING WITHHOLDING TAX (WHT) EXEMPTIONS FOR THE FINANCIAL
SECTOR
As part of the Government’s process to continually review tax concessions to ensure
relevance and usefulness, the following changes are made:-
(a) To ensure that the relevance of the tax concessions is periodically reviewed, a review
date of 31 December 2022 will be introduced for the WHT exemptions for the
following payments:-
(i) Payments made under cross currency swap transactions made by Singapore
swap counterparties to issuers of Singapore dollar debt securities;
(ii) Payments made under interest rate or currency swap transactions by financial
institutions;
(iii) Payments made under interest rate or currency swap transactions by MAS; and
(iv) Specified payments made under securities lending or repurchase agreements by
specified institutions; and
(b) The following WHT exemptions will be legislated, for payments under agreements
entered into on or after 20 February 2018, along with a review date of 31 December
2022:-
(i) Interest on margin deposits paid by members of approved exchanges for
transactions in futures; and
(ii) Interest on margin deposits paid by members of approved exchanges for spot
foreign exchange transactions (other than those involving Singapore dollar).
(c) The WHT exemptions for the following payments under agreements entered into on
or after 1 January 2019 will be withdrawn:-
(i) Interest from approved Asian Dollar Bonds; and
(ii) Payments made under over-the-counter financial derivative transactions by
companies with FSI-Derivatives Market awards that were approved on or before
19 May 2007.
Unless the WHT exemptions under (a) and (b) are extended, the WHT exemptions will
cease to apply to payments that are liable to be made under agreements entered into on
or after 1 January 2023. WHT exemptions will continue to apply to payments that are
liable to be made on or after 1 January 2023, under agreements entered into on or
before 31 December 2022.
All other conditions of the schemes remain the same.
Further details will be released by MAS by May 2018.
-5-Paul Wan & Co., Singapore Budget Synopsis 2018
18. EXTENDING OF QUALIFYING DEBT SECURITIES (QDS) INCENTIVE SCHEME AND
ALLOW QUALIFYING DEBT SECURITIES PLUS (QDS+) INCENTIVE SCHEME TO
LAPSE
To continue supporting the development of Singapore’s debt market, the QDS scheme
will be extended till 31 December 2023 and the QDS+ scheme will be allowed to lapse
after 31 December 2018.
Debt securities with tenure beyond 10 years, and Islamic debt securities that are issued:-
(a) After 31 December 2018 can enjoy tax concessions under the QDS scheme if the
conditions of the QDS scheme are satisfied;
(b) On or before 31 December 2018 can continue to enjoy the tax concessions under the
QDS+ scheme if the conditions of the QDS+ scheme are satisfied.
Under the current QDS scheme, tax concessionary rate of 10% is applicable to qualifying
companies and bodies of persons in Singapore; and tax exemption for qualifying non-
residents and qualifying individuals.
Further details will be released by MAS by May 2018.
19. EXTENDING AND ENHANCING OF FINANCIAL SECTOR INCENTIVE (FSI) SCHEME
To further strengthen Singapore’s position as a leading financial centre, the FSI scheme
will be extended till 31 December 2023.
The scope of trading in loans and their related collaterals is expanded to include
collaterals that are prescribed infrastructure assets or projects. The change will apply to
income derived on or after 1 January 2019 in respect of new and renewal awards
approved on or after 1 June 2017.
All other conditions of the scheme remain the same.
The current FSI scheme accords concessionary tax rates of 5% to 13.5% on income
from qualifying activities.
Further details will be released by MAS by May 2018.
20. EXTENDING OF TAX DEDUCTION FOR BANKS (INCLUDING MERCHANT BANKS)
AND QUALIFYING FINANCE COMPANIES
To promote the overall robustness and stability of the Singapore financial system, the tax
deduction for impairment and loss allowances made in respect of non-credit-impaired
financial instruments under Section 14I of the Singapore Income Tax Act will be
extended till YA 2024 (with December FYE) or YA 2025 (with non-December FYE).
All other conditions of the scheme remain the same.
Further details will be released by MAS by May 2018.
-6-Paul Wan & Co., Singapore Budget Synopsis 2018
21. EXTENDING OF INSURANCE BUSINESS DEVELOPMENT – INSURANCE BROKING
BUSINESS (IBD-IBB) SCHEME AND ALLOW THE INSURANCE BUSINESS
DEVELOPMENT – SPECIALISED INSURANCE BROKING BUSINESS (IBD-SIBB)
SCHEME TO LAPSE
To further strengthen Singapore’s position as a leading insurance and reinsurance
centre, the IBD-IBB scheme will be extended till 31 December 2023 with no changes to
the existing conditions.
To streamline and simplify the insurance tax incentives, the IBD-SIBB scheme will be
allowed to lapse after 31 March 2018. Specialty insurance broking and advisory services
will be incentivised under the IBD-IBB scheme, at a concessionary tax rate of 10%.
Further details will be released by MAS by May 2018.
22. EXTENDING OF TAX EXEMPTION FROM TRADING IN SINGAPORE GOVERNMENT
SECURITIES (SGS)
To strengthen our primary dealer network and encourage trading in SGS, the tax
exemption on income derived by primary dealers from trading in SGS will be extended till
31 December 2023.
Further details will be released by MAS by May 2018.
23. WITHHOLDING TAX (WHT) EXEMPTION ON CONTAINER LEASE PAYMENTS
MADE TO NON-RESIDENT LESSORS
This scheme will be reviewed on 31 December 2022 for its relevance and the need to be
extended. If not extended, such payments accruing to a non-resident lessor under any
lease or agreement entered into on or after 1 January 2023 in respect of the use of a
qualifying container for the carriage of goods by sea will be subject to WHT.
Further details will be released by MAS in due course.
24. PRODUCTIVITY SOLUTIONS GRANT (PSG)
To make it easier for businesses to adopt technologies and increase productivity, the
PSG will provide funding support for up to 70% of qualifying costs incurred on pre-
scoped, off the shelf productivity solutions.
Businesses can apply through the Business Grants Portal with effect from 1 April 2018.
Further details will be released by the MTI’s COS.
-7-Paul Wan & Co., Singapore Budget Synopsis 2018
25. ENTERPRISE DEVELOPMENT GRANT (EDG)
The SPRING Singapore’s Capability Development Grant and IE Singapore’s Global
Company Partnership grant will combine into EDG and provide funding support for up to
70% of qualifying costs from financial year 2018 to 2019.
Further details will be released at MTI’s COS.
26. PACT
Existing grant schemes that support various forms of partnerships between companies
will be combine into PACT, and will provide funding support for up to 70% of qualifying
costs for collaborations between companies in areas including capability upgrading,
business development, and internationalisation.
Further details will be released at MTI’s COS.
27. INFRASTRUCTURE OFFICE
An infrastructure office will be set up to bring together local and international partners
across the value chain and provide a platform for information exchange on infrastructure
opportunities in Asia, facilitate infrastructure investments and financing, and enable
infrastructure players in the region to tap on these opportunities.
Further details will be released at MTI’s and Ministry of Law’s COS.
28. TECH SKILLS ACCELERATOR (TeSA)
TeSA is a tripartite initiative by the Government, industry and NTUC to build and
strengthen the digital workforce for the Singapore economy, and to enhance
employability outcomes for individuals in the information and communications technology
(“ICT”) profession. It will scale up existing programmes to develop more local ICT
professionals in new sectors and in emerging skill areas like data analytics, artificial
intelligence, and cyber security.
Further details will be released at MCI’s COS.
29. CAREER TRIAL
To strengthen employment support for lower-to middle-income works, Work Trial will be
upgraded into Career Trial to help jobseekers try out new jobs and assess new careers.
Further details will be released at MOM’s COS.
-8-Paul Wan & Co., Singapore Budget Synopsis 2018
GOODS AND SERVICES TAX (GST)
1. GST RATE
The current GST rate is 7%. With wide anticipation on the increase in GST rate, the
Minister had announced that GST rate will rise from 7% to 9% between the years 2021
to 2025 depending on the state of Singapore economy, growth in expenditures and how
buoyant our existing taxes are. The increase will be implemented progressively to help
fund future expenditure especially in healthcare costs due to an ageing population.
A summary of the past GST rates are as follows:-
Period covered GST rates
* 01/04/1994 to 31/12/2002 3%
01/01/2003 to 31/12/2003 4%
01/01/2004 to 30/06/2007 5%
01/07/2007 onwards 7%
* Date GST was first implemented in Singapore
2. INTRODUCING GST ON IMPORTED SERVICES
Currently, GST is not applicable on imported services provided by an overseas supplier
which does not have an establishment in Singapore.
To ensure our tax system remains fair and resilient in a digital economy, the Minister has
introduce GST on imported services relating to Business to Business (B2B) imported
services via a reverse charge mechanism from 1 January 2020. Majority of businesses in
Singapore today makes taxable supplies and thus would not be affected by this reverse
charge mechanism. Only businesses that: (i) make exempt supplies, or (ii) do not make
any taxable supplies need to apply reverse charge.
The taxation of Business to Customer (B2C) imported services will take effect through an
Overseas Vendor Registration (OVR) mode. This requires overseas suppliers and
electronic marketplace operators which make significant supplies of digital services to
local consumers to register with IRAS for GST.
Further details will be released by IRAS by end-February 2018.
-9-Paul Wan & Co., Singapore Budget Synopsis 2018
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- 10 -Paul Wan & Co., Singapore Budget Synopsis 2018
INDIVIDUALS AND HOUSEHOLDS
1. INDIVIDUAL INCOME TAX RATE
The current individual progressive income tax rates as shown below remained
unchanged since Year of Assessment (YA) 2017. There was no revision unveiled in this
year’s budget.
Chargeable
Income Tax Rate Gross Tax
(S$) (%) Payable (S$)
On the first 20,000/- 0 0
On the next 10,000/- 2 200/-
On the first 30,000/- - 200/-
On the next 10,000/- 3.5 350/-
On the first 40,000/- - 550/-
On the next 40,000/- 7 2,800/-
On the first 80,000/- - 3,350/-
On the next 40,000/- 11.5 4.,600/-
On the first 120,000/- - 7,950/-
On the next 40,000/- 15 6,000/-
On the first 160,000/- - 13,950/-
On the next 40,000/- 18 7,200/-
On the first 200,000/- - 21,150/-
On the next 40,000/- 19 7,600/-
On the first 240,000/- - 28,750/-
On the next 40,000/- 19.5 7,800/-
On the first 280,000/- - 36,550/-
On the next 40,000/- 20 8,000/-
On the first 320,000/- - 44,550/-
In excess of 320,000/- 22
2. INCREASING ANNUAL EDUSAVE CONTRIBUTIONS
The Government will increase the annual Edusave contributions with effect from January
2019 as follows:-
Current With Effect from January
2019
Each Primary School Student S$200/- S$230/-
Each Secondary School Student S$240/- S$290/-
3. EDUSAVE MERIT BURSARY
The Government will revise the income eligibility criteria of the Edusave Merit Bursary to
provide more support to Singapore Citizen (SC) students, as shown below:-
- 11 -Paul Wan & Co., Singapore Budget Synopsis 2018
Current Income Revised Income Eligibility
Eligibility Criteria Criteria (From 2018)
Gross Monthly Household
S$6,000/- S$6,900/-
Income
Gross Monthly Household
S$1,500/- S$1,725/-
Per Capita Income
Further details will be released by MOE’s COS.
4. ENHANCING PROXIMITY HOUSING GRANT
To strengthen support for family members to live with or near each other, the
Government will enhance the proximity housing grant with immediate effect i.e. 20
February 2018 as follows:-
(a) Singles who buy a resale HDB flat to live with parents will receive S$15,000/-
(b) Singles who buy a resale HDB flat to live near parents will receive S$10,000/-
(c) Families who buy a resale HDB flat to live with parents of children will receive
S$30,000/-
(d) The definition of "near" under the Proximity Housing Grant is extended to "within
4km"
5. FOREIGN DOMESTIC WORKER (FDW) LEVY
The Government will make three adjustments to the foreign domestic worker (FDW) levy
framework with effect from 1 April 2019 as shown below:-
(a) For the first FDW who is employed without levy concession, the monthly levy will be
raised from S$265/- to S$300/-.
(b) For the second FDW who is employed without levy concession, the monthly levy will
be raised from S$265/- to S$450/-.
(c) The qualifying age for levy concession under the aged person scheme will be raised
from 65 to 67 years. This is in light of improving life expectancy and health of
Singaporeans. However, all households with persons aged 65 and 66, which are
enjoying or have enjoyed the levy concession under the aged person scheme before
1 April 2019, will continue to pay the monthly levy rate of S$60/- on and after 1 April
2019.
Households with young children below 16 years of age, or elderly persons, or persons
with disabilities, the monthly concessionary FDW levy rate remains unchanged at S$60/-.
Revised Monthly
Type of Levy Current Monthly Rate
Rate (from 1 April 2019)
1st FDW S$265/- S$300/-
Normal
2nd FDW S$265/- S$450/-
Concessionary S$60/- S$60/- (no change)
- 12 -Paul Wan & Co., Singapore Budget Synopsis 2018
Levy payable before Levy payable on and after
Scenario 1 April 2019 1 April 2019
1. Household has two eligible persons under levy concession scheme 1
Employs one FDW S$60/- S$60/- (no change)
Employs two FDWs S$60/- + S$60/- = S$120/- S$60/- + S$60/- = S$120/-
(no change)
2. Household has one eligible person under levy concession scheme
Employs one FDW S$60/- S$60/- (no change)
Employs two FDWs S$60/- + S$265/- = S$325/- S$60/- + S$300/- = S$360/-
3. Household has no person eligible for levy concession
Employs one FDW S$265/- S$300/-
Employs two FDWs S$265/- + S$265/- = S$530/- S$300/- + S$450/- = S$750/-
1
Employers can apply for concessionary levy for up to two FDWs if they have two
eligible persons who live in the same household.
6. SG BONUS
In view of the hefty budget surplus compared with a year ago, all Singaporeans aged 21
years and above in 2018 will receive a one-off SG Bonus cash payment of S$100/- to
S$300/- depending on their income. The SG Bonus will be paid out to about 2.7 million
recipients by end-2018, and is estimated to cost about $700 million.
Singaporeans aged 21 years and above in 2018
Assessable Income for YA2017
Up to S$28,000/- S$28,001/- to S$100,000/- Above S$100,000/-
S$300/- S$200/- S$100/-
Note: Individuals who own more than one property are eligible for SG Bonus of S$100/-
each.
7. GST Voucher – CASH
Cash recipients will continue to receive up to S$300/- in cash payments to cover some of
their household expenses, as shown below:-
Singaporeans aged 21 years and Annual Value of Home as at 31 Dec 2017
above in 2018
S$13,001/- to
Assessable Income for YA2017 Up to S$13,000/-
S$21,000/-
S$28,000/- and below
GSTV – Cash payment S$300/- S$150/-
The GST Voucher – Cash will be paid out in August 2018 and will benefit about 1.4
million Singaporeans.
- 13 -Paul Wan & Co., Singapore Budget Synopsis 2018
8. GST VOUCHER – UTILITIES-SAVE (U-SAVE)
In Budget 2017, the Government announced a permanent increase to the GST Voucher
– U-Save by between S$40/- to S$120/-, with the exact quantum depending on the flat
type which took effect from July 2017.
The Government will provide additional U-Save of S$20/- per year for 3 years, from 2019
to 2021, to eligible Housing and Development Board (HDB) households, as shown
below:-
Annual U-Save from
Annual U-Save
HDB Flat Type 2019 – 2021
for 2018
(after S$20/- increase)
1- and 2-Room S$380/- S$400/-
3-Room S$340/- S$360/-
4-Room S$300/- S$320/-
5-Room S$260/- S$280/-
Executive /
S$220/- S$240/-
Multi-Generation
Note: Households whose members own more than one property are not eligible. The
GSTV – U-Save is paid over four quarters, in January, April, July, October.
The increase in U-Save is expected to cover average increase in electricity and gas
expenditures for about 900,000 HDB households arising from the carbon tax. This will
help households adjust to the carbon tax when this is first implemented as they make
efforts to reduce their electricity and gas consumption over time.
9. GST VOUCHER – MEDISAVE FOR OLDER SINGAPOREANS
Singaporeans who are 65 years of age and above in 2018 will continue to receive GST
Voucher – Medisave for 2018, as shown below:-
Annual Value of Home as at 31 Dec 2017
Age in 2018
Up to S$13,000 S$13,001 to S$21,000
65 to 74 years S$250/- S$150/-
75 to 84 years S$350/- S$250/-
85 years and above S$450/- S$350/-
Note: Individuals who own more than one property are not eligible for the GSTV
Scheme.
Together with the Pioneer Generation Medisave / 5-Year Medisave Top-up, eligible older
Singaporeans will receive up to S$1,250/- in Medisave Top-up in 2018, as follows:-
- 14 -Paul Wan & Co., Singapore Budget Synopsis 2018
Age in 2018 Amount of Medisave Top-up
59 to 64 years Up to S$200/-
65 to 73 years Up to S$450/-
74 years Up to S$650/-
75 to 78 years Up to S$750/-
79 to 83 years Up to S$950/-
84 years Up to S$1,150/-
85 years and above Up to S$1,250/-
10. SERVICE AND CONSERVANCY CHARGES (S&CC) REBATE
The Government has decided to extend the S&CC rebate for another year for eligible
HDB households as follows:-
FY2018 S&CC Rebate (no. of months)
HDB Flat Type April July October January Total for
2018 2018 2018 2019 FY2018
1- and 2-room 1 1 1 0.5 3.5
3- and 4-room 1 0.5 0.5 0.5 2.5
5-room 0.5 0.5 0.5 0.5 2
Executive/ Multi-generation 0.5 0.5 0.5 - 1.5
Note: Households whose members own more than one property are not eligible for the
S&CC rebate.
11. COMMUNITY NETWORKS FOR SENIORS (CNS)
In 2016, the Government introduced the Community Networks for Seniors (CNS) to bring
together Government agencies and community partners to do ABC:-
(a) A is for Active Ageing, to encourage seniors to remain active and stay healthy.
(b) B is for Befriending, to link up lonely seniors with new friends.
(c) C is for Care, for frail and vulnerable seniors.
The Government will continue and expand CNS nationwide by 2020 to reach out and
serve more seniors.
12. INTEGRATING HEALTH AND SOCIAL SUPPORT FOR SENIORS
The social and health related services for seniors will be consolidated under the Ministry
of Health (MOH) to streamline and improve the delivery of services to our seniors.
The Ministry of Social and Family Development (MSF) will transfer its social aged care
functions under the Senior Cluster Network and other programmes to MOH.
The Pioneer Generation Office (PGO) will be merged with Agency for Integrated Care
(AIC) to support the expansion of CNS nationwide. PGO will be renamed as “Silver
Generation Office”.
- 15 -Paul Wan & Co., Singapore Budget Synopsis 2018
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- 16 -Paul Wan & Co., Singapore Budget Synopsis 2018
OTHERS
1. MEASURES TO ENCOURAGE REDUCTION OF GREENHOUSE GAS EMISSIONS
(a) Carbon Tax
As announced on last year’s budget, the Government will implement a carbon tax on
the emission of greenhouse gases (GHG) to reduce carbon emissions from 2019.
A carbon tax will be applied uniformly to all sectors, without exemption, on the total
GHG emissions of facilities that produce 25,000/- tonnes or more of carbon dioxide-
equivalent (tCO2e) of emissions in a year.
The carbon tax will take the form of a fixed-price credits-based (FPCB) mechanism
issued by National Environment Agency at the prevailing carbon tax rate. Taxable
facilities will pay the tax by purchasing and surrendering the number of carbon credits
corresponding to their emissions.
The carbon tax rate will be set at S$5/- per tCO2e of emissions from 2019 to 2023,
with the first payment of the carbon tax in 2020, based on emissions in calendar year
2019.
The Government will review the carbon tax rate by 2023, and intends to increase the
carbon tax rate to between S$10/- and S$15/- per tCO2e of emissions by 2030,
depending on the international climate change developments, the progress of
Singapore’s emissions mitigation efforts, and Singapore’s economic competitiveness.
An additional carbon tax will not be imposed on petrol, diesel and compressed
natural gas as there is excise duties to encourage reduction of the use of these fuels
and therefore reduce GHG emissions. Excuse duties will also not be increase at this
point of time but the Government will continue to review and adjust them periodically.
The Carbon Pricing Bill will be tabled in Parliament in March 2018.
Further details will be announced by the Ministry of the Environment and Water
Resources (MEWR) at the COS.
(b) Improving Energy Efficiency
The Government will set aside funds starting from 2019 to enhance support for
companies to improve energy efficiency and reduce emissions, through the following
schemes:-
(i) Productivity Grant (Energy Efficiency)
The Productivity Grant (Energy Efficiency), or PG(EE), encourages owners and
operators of new and existing industrial facilities to invest in energy efficient
equipment or technologies.
- 17 -Paul Wan & Co., Singapore Budget Synopsis 2018
(ii) Energy Efficiency Fund
The Energy Efficiency Fund (E2F) supports companies to undertake:-
(1) Energy assessments;
(2) Energy efficient design of new facilities; and
(3) Energy efficiency investments.
Qualifying costs for both schemes include manpower, consultancy, equipment and
materials costs, and other logistical overheads.
Further details will be announced by the MOT and MEWR in due course.
(c) Support for Housing and Development Board (HDB) households – Goods and
Services Tax Voucher (GSTV) – Utilities-Save (U-Save)
The estimated impact of the S$5/- per tCO2e carbon tax on households will be small,
at about 1% of total electricity and gas expenses on average. Hence, the
Government has provided additional U-Save of S$20/- per year for three years, from
2019 to 2021, to eligible HDB households affected by this carbon tax introduced.
2. INCREASING IN STAMP DUTY ON RESIDENTIAL PROPERTY
To improve the progressivity of the stamp duty regime, the top marginal Buyer’s Stamp
Duty rate will be raised from 3% to 4%, and applied on the value of residential property
acquired on or after 20 February 2018 in excess of S$1 million, as follows:-
Tiers (Residential Properties)
Rates Current New
1% First S$180,000/- First S$180,000/-
2% S$180,001/- to S$360,000/- S$180,001/- to S$360,000/-
3% Above S$360,000/- S$360,001/- to S$1,000,000/-
4% - Above S$1,000,000/-
The Buyer’s Stamp Duty rates for non-residential properties remain unchanged.
3. INCREASING IN EXCISE DUTIES FOR TOBACCO PRODUCTS
To discourage the consumption of tobacco products, the excise duties across all tobacco
products will be raised by 10%, with effect from 19 February 2018:-
(a) Cigarettes and other manufactured tobacco: From S$388/- / kgm or 38.8 cents / stick
of cigarette to S$427/- / kgm or 42.7 cents / stick of cigarette.
(b) Beedies, Ang Hoon and smokeless tobacco: From S$299/- / kgm to S$329/- / kgm.
(c) Unmanufactured and cut tobacco and other tobacco refuse: From S$352/- / kgm to
S$388/- / kgm.
- 18 -Paul Wan & Co., Singapore Budget Synopsis 2018
N otes
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- 19 -PAUL WAN & Co.
Public Accountants And
Chartered Accountants of Singapore
10 Anson Road, #35-07/08 International Plaza, Singapore 079903
Tel : 65-6220 3280 Fax : 65-6224 5473
Email : taxdept@pwco.com.sg Website : www.pwco.com.sgYou can also read
