As announced by the Finance Minister Tharman on 21 Feb 2014, this is a 'People' Budget. As such, there are not many things for businesses. In fact, if you are an old person (called 'Pioneers'), you will get lots of benefits. Not so for smokers and drinkers, there will be a 10% tax and 25% increase respectively.
Here are the highlights: (more details will be revealed by the Government over the next week).
- All Singaporeans will receive GST vouchers of $250 cash, an increase over last year. This may not mean much to most you, but will make your staff feel slightly happier TODAY
- Excise duty on tobacco and liquor to rise by 10% and 25% respectively, effective from 21 Feb 2014. Drinkers will face rising cost, and this will affect pubs that rely on liquor sale negatively
- Betting duty rates on lotteries to rise to 30% from 25%. This has zero impact on the punter (impact on Singapore Pools only)
- Levy for basic-skilled or R2 work permit holders to rise to $700 from $600 in July 2016. This only affects Construction indusry
- To raise Central Provident Fund (CPF) Medisave employer contribution rate by 1 % point for all from January 2015. This has a marginal effect on business cost, but would mean that hiring foreigners is relatively cheaper
- To offset point 5 above, Government will provide 0.5% Temporary Employment Credit and Special Employment Credit of up to 0.5% for one year.
- Elderly will get discounted outpatient care, top ups to their Medisave accounts, and subsidies for the new national MediShield Life insurance system
- To raise CPF contribution rates for workers aged 50 to 55 by 1.5% points, 1% point from the employer and 0.5% from the employee. Will raise employer contribution rate for those aged 55 to 65 by 0.5% points
- PIC Scheme, which was originally to end by 2014, will be extended for 3 years to 2017. (PIC Scheme gives 60% cash or 300% tax deduction if you spend on Training, IT Hardware, Software, Automation Equipment and Intellectual Property Rights). But no additional PIC Bonus (to the original $15K). For the 7 Changes to PIC that you must know, click here.
- New Scheme to Get Companies to harness ICT (Information Communications and Technology), including subsidy on fibre broadband (at least 100 Mbps) and 80% support for Emerging Solutions
- Extension of 50% additional tax deduction for R & D expenditure till 2024
By Andy Ng, Chief Trainer at Asia Trainers, details at here.
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