On February 16, Singapore’s Deputy Prime Minister and Minister of Finance, Heng Swee Keat, unveiled Budget 2021.
The announcement came a day after Singapore reported its worst recession since independence. Budget 2021, with the theme “Emerging Stronger Together” combines measures to assist families, workers and businesses to weather the crisis in the immediate term.
According to the Deputy Prime Minister, Budget 2021 will shift from containment to restructuring by accelerating structural changes as the nation’s economy continues to open.
Singapore expects its gross domestic product (GDP) to grow 4% to 6% this year.
The following are some of the key highlights from Singapore’s Budget 2021:
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Household Support Package, including GST Vouchers
- An SGD900 million Household Support Package will be rolled out for families amid the ongoing economic uncertainty
- Singaporeans will be receiving a one-off GST Voucher – Cash Special Payment of SGD200 for eligible Singaporeans.
- Service and conservancy charge (S&CC) rebates and good and services tax (GST) vouchers included.
- Additional SGD200 top-up to their Child Development Account, Edusave account, or Post-Secondary Education Account for each child below the age of 21.
- Around 1.3 million households will receive SGD100 Community Development Council (CDC) vouchers that can be used at participating heartland businesses.
- Eligible Singaporean households in Housing Board flats will receive rebates to offset between 1½ and 3½ months of S&CC over the year.
- Around 1.4 million lower-income Singaporeans will receive an additional GST Voucher – Cash Special Payment of SGD200 in June.
- Around 950,000 households will receive additional utilities rebates of between SGD120 and SGD200 under GST Voucher – U-save Special Payment that will be credited in April and July.
Extension of Job Support Scheme
- Wage subsidies under the Jobs Support Scheme (JSS) will be extended for 6 months to help businesses badly hit by the pandemics to retain workers.
- The subsidies, which range from 10% to 30% will cover wages paid from April to September for firms in sectors affected by the pandemic such as aviation, aerospace and tourism.
- For firms in other industries including food, services, retail, marine, offshore, arts and entertainment will be extended from April to June.
- The Wage Credit Scheme will also be extended by a year, at a co-funding level of 15%, to further support wage increments.
Support for aviation sector
- SGD870 million to extend cost relief for aviation sector to preserve core capabilities.
- SGD133 million for Covid-19 Driver Relief Fund to support taxi and private-hire car drivers.
- 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.
S Pass Quota for foreign workers in manufacturing
- Foreign workers on S Passes can make up only up to 18% of the workforce at firms in manufacturing sectors from 1 Jan 2022.
- This quota will be further cut to 15% from 1 Jan 2023. It is currently 20%
Covid-19 Resilience Package
- An SGD11 billion Covid-19 Resilience Package will be allocated to recover Singapore from the Covid-19 pandemic.
- Of the SGD11 billion, SGD4.8 billion will be allocated to public health and providing everyone who is eligible with free vaccination against the virus.
- There will be SGD1.7 billion on the reserves to pay for measures needed to fight against Covid-19.
Cheaper electric vehicles, more charging stations
- Singapore will deploy 60,000 charging stations at public carparks and private premises by 2030.
- SGD30 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.
- Currently, all car buyers have to pay at least SGD5,000 in ARF, regardless of the tax rebate a car is entitled to.
Petrol Duties will be raised
- The duty for premium grade (98-octane and above) petrol will increase 15 cents per litre to 79 cents per litre, the intermediate grade (92-octane and 95-octane) petrol will increase 10cents per litre to 66 cents per litre.
- There will be 1-year road tax rebates given to Singaporean in order to help Sinagporans transit into the increasing petrol duties.
- Taxi and private-hire drivers will receive a 15% road tax rebate for a year and SGD360 of additional petrol duty rebate over four months.
- Cars using petrol will be given a one-year tax rebate of 15%.
GST hike between 2022 to 2025
- GST rate hike will not happen in the year 2021 due to current economic conditions.
- It will take place sometime from 2022 to 2025.
- 6 billion Assurance Package to cushion the impact of the hike when it takes place.
- GST will be imposed on imported low-value goods from 1 Jan 2023.
- Low-value goods that are worth SGD400 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.
- Overseas suppliers of goods and services will be subject to the same GST treatment as local suppliers