Budget 2012 HighlightsFebruary 18, 2012 at 1:46 pm | Posted in But Seriously | Leave a comment
Cribbed these notes yesterday while following the Budget presentation…
Reducing Foreign Workers
The amount of foreign workers will be reduced through the following measures:
Continuing with the increase in foreign worker levies and considering higher levies in the future
Raising the eligibility criteria for Employment Pass and S Pass holders.
Reducing Man-Year Entitlement (MYE) quotas by 5% and raising levies for basic skilled workers hired outside the MYE quotas
Reducing the Dependency Ratio Ceiling (DRC) for Manufacturing and Service industries:
- Manufacturing DRC: 65% to 60%
- Services DRC: 50% to 45%
- S Pass sub-DRC: 25% to 20%
Moves to help SMEs
Special Employment Credit (SEC) for companies who have Singaporean workers older than 50 years old and earning up to $3,000 per month. The SEC will be 8% of the wages. A lower SEC will be given for 50 years and above workers earning $3,000 to $4,000 per month.
A one-off cash grant to help SMEs offset higher business costs because they have to cut their dependence on foreign employees. SMEs will receive a cash grant pegged at 5% of their revenues in 2012 (capped at $5,000).
The Renovation and Refurbishment Deduction Scheme is now a permanent feature and the amount raised from $150,000 to $300,000.
Mergers and Acquisitions (M&A) Allowance scheme – SMEs get a 200% tax allowance on transaction costs (legal and tax advisory fees), $100,000 cap.
Trade financing schemes expanded to help SMEs with business in emerging markets.
Productivity and Innovation Credit (PIC) enhanced to provide a 60% cash payout to cover up to $100,000 of firm’s PIC expenditures. In-house training costs of up to $10,000 per year will be allowed. Requirement training programmes certified by WDA or ITE removed for the first $10,000 used for in-house training.
90% course subsidy for SMEs to upgrade workers through courses certified by WDA/ Academic CET programs at Polys/ITE. Absentee payroll cap increased to $7.50/hr. Also applies to self-employed persons.
Subsidies for capability development for SMEs increased to 70%.
Temasek Holdings has established a specialized project finance company (PFC). The PFC aims to have cross-border projects with significant Singapore-based corporate participants making up about 80% of its portfolio. The Government will guarantee the loans that the PFC will take.
The Double Tax Deduction for Internationalisation scheme will be simplified.
Developing the Economy
The Government will inject $905 million into the Tourism Development Fund (TDF). The GST Tourist Refund Scheme will also be for international cruise passengers departing from the Singapore Cruise Center and the future International Cruise Terminal.
GST relief for goods brought in by foreign and local travelers will be simplified and enhanced.
$150 million for A*STAR and Economic Development Board to develop solutions for deepwater oil production.
Investment-grade gold and other precious metals exempted from GST
Clearer guidelines for companies disposing of equity investments and income taxation
Tax on beedies, “ang hoon” and smokeless tobacco will be raised by 20%, unmanufactured tobacco by 10%.
Enhancing the Transport System
800 buses will be added over the next five years (20% increase): Government paying for 550 of those buses
Green Vehicle Rebate Scheme (GVR) will be replaced with a new Carbon Emissions-based Vehicle Scheme (CEVS) for private cars. Cars with low carbon emissions will enjoy up to $20,000 rebate on their ARF, and cars with high carbon emissions will pay a surcharge of up to $20,000. The GVR will remain for commercial vehicles and motorcyles for another two years.
Special Tax for Euro V compliant cars will be lowered from $1.25 per cc to $0.40 per cc.
The Additional Transfer Fee (ATF) abolished.
Permanent GST Voucher for lower-income Singaporeans. The lower half of retiree households will get a full offset, while those in upper half will get a significant offset.
Lower-income families will also offset about half their GST bills. The amount offset will depend on income and Annual Value (AV) of their homes.
It will come in three components:
- For families in the bottom 40% and who live in HDB flats or private properties with an AV of up to $20,000
- Those in HDB flats will get $250 per year
- Those in private properties will get $100 per year so long as their income is below $24,000.
- For those above 65 years old and live in HDB flats or private properties with an AV of up to $20,000
- For those in HDB flats
- 65 years old to 74 years old: $250 per year
- 75 years old to 84 years old: $350 per year
- 85 years old and above: $450 per year
- For those in private properties
- 65 years old to 74 years old: $150 per year
- 75 years old to 84 years old: $250 per year
- 85 years old and above: $350 per year
- 1- and 2-Room HDB Flat: $260 per year
- 3-Room HDB Flat: $240 per year
- 4-Room HDB Flat: $220 per year
- 5-Room HDB Flat: $200 per year
- Executive HDB Flat: $180 per year
Helping Senior Citizens
CPF contribution rates for older workers will be increased from September 2012:
- 50 – 55 years old: 14% for employer contribution (up 2%), 18.5% for employee contribution (up 0.5%)
- 55 to 60 years old: 10.5% for employer contribution (up 1.5%), 13%ncrease for employee contribution (up 0.5%)
- 60 to 65 years old: 7% for employer contribution (up 1.5%), 7.5% for employee contribution (no change)
The increased contribution rates will be allocated more to the Special Account (SA).
Contribution rates of self-employed persons, aged 50 and above, into their Medisave Accounts will be raised to 9.5%.
Earned Income Relief will be increased:
- 55 to 59 years old: $6,000 per annum
- 60 years old and above: $8,000 per annum
Silver Housing Bonus of $20,000 will be given to older Singaporeans who want to sell their existing flats and purchase 3-room or smaller HDB flats; $15,000 will be in cash, and $5,000 will be credited to their CPF account.
The Lease Buyback Scheme will be enhanced by doubling the incentive from $10,000 to $20,000; $15,000 will be in cash, and $5,000 will be credited to their CPF account.
Healthcare Expenditure will double from $4 billion to $8 billion over the next five years.
- Bed capacity in acute hospitals will be increased by 30% by 2020.
- Bed capacity in community hospitals will be increased by 100% by 2020.
- Two new community hospitals will be built in Outram and Sengkang.
Long term care services capacity will be doubled by 2020. This will include nursing homes, home-based health and social services, day care and rehabilitations facilities, and Senior Activity Centres. There will also be more specialist outpatient services closer to the community.
Lower-income patients will receive a 75% government subsidy, and those from the median income group will receive a 20% to 50% subsidy. Subsidies for nursing homes, day care and rehabilitation facilities and home-based care packages will be raised.
$120 per month grant will be given to families hiring a foreign domestic helper to help care for elderly family members who have severe dementia or are immobile and unable to care for themselves.
Each household with an elderly member will get $2,000 for home modifications.
GST will be absorbed for subsidized patients in the long term care sector.
There will be a $600 million top-up to Medifund.
MediShield coverage increased from 85 to 90.
One-off MediSave Top Up:
- 1 to 40 years old: $50
- 41 to 50 years old: $100
- 51 to 60 years old: $200
- 61 to 75 years old: $300
- 76 years old and above: $400
Helping Singaporeans with Disabilities
There will be an increase in places in centers for children who need intensive early intervention.
Development Support Program will be introduced in mainstream pre-school centers to provide learning support and therapy interventions for children with mild speech, language and learning difficulties.
A Special Employment Credit will be given to employers who hire SPED graduates. The employers will get a credit of 16% of the employee’s wages.
Workfare Income Supplement scheme extended to all SPED graduates.
The Handicapped Earned Income Relief to be doubled for all persons with disabilities.
Singaporeans with severe disabilities to enjoy same enhanced care subsidies that older Singaporeans will receive.
There will also be a 25% expansion of places in Day Activity Centres.
There will also be an expansion of places in residential homes and the provision of transport options.
Helping Lower-Income Families
A new per capita household income (PCI) criterion will be introduced to pre-school subsidies instead of just household income.
The household income ceiling for the MOE Financial Assistance Scheme will be raised from $1,500 to $2,500 per month. Will also be extended to SPED schools.
Over the next three years an additional top up, of up to $15,000 per year, will be given to School Advisory and Management Committees. Will also be extended to SPED schools.
The household income ceiling for Student Care Fee Assistance will be raised to $3,500 per month.
There will be a $200 million top-up to the Edusave Endowment Fund and a $200 million top-up to the ComCare Endowment Fund. $10 million will be given to Self-Help Groups and the CCC ComCare Fund.