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Singapore Budget 2022 summary

Singapore Budget 2022 summaryDear Reader,

Welcome to our Singapore Budget 2022 summary.

The following is the Budget 2022 Summary announced by Minister for Finance, Mr. Lawrence Wong in his Budget Statement for the Financial Year 2022 which was delivered in Parliament on Friday, 18 February 2022.

 

SUPPORT FOR BUSINESSES

IMMEDIATE SUPPORT FOR BUSINESSES

  • $500 million Jobs and Business Support Package
    • New Small Business Recovery Grant
      • $1,000 payout per local employee (up to $10,000 per firm) for SMEs in sectors most affected by COVID-19 restrictions
      • $1,000 payout to local sole proprietors and partnerships in eligible sectors, and SFA-licensed hawkers, market, and coffeeshop stallholders, who do not hire local employees
    • Extend Jobs Growth Incentive to Sep 2022 to encourage hiring of workers who face greater difficulties in finding jobs
  • Extend Temporary Bridging Loan Programme and Enterprise Financing Scheme (EFS) – Trade Loan to 30 Sep 2022, with revised parameters
  • Extend enhanced EFS – Project Loan to 31 Mar 2023 to support domestic construction projects
  • Aviation Support Package to preserve core capabilities and enhance status as an international aviation hub

DIGITALISATION AND INNOVATION

  • Additional $200 million for building digital capabilities
  • Increase capacity of centres that engage in technology, innovation, and enterprise activities in Polytechnics and ITEs over next 5 years

STRENGTHEN LOCAL ENTERPRISES

  • $600 million to scale up Productivity Solutions Grant (PSG) to support more than 100,000 PSG projects over next 4 years
  • New Singapore Global Enterprises initiative for larger local enterprises to innovate and internationalise
  • New Singapore Global Executive Programme to attract more young local talent to join Singapore global enterprises

ENTERPRISE FINANCING SCHEME

  • Enhance Merger & Acquisition (M&A) Loan to include domestic M&A activities from 1 Apr 2022 to 31 Mar 2026
  • Maintain 70% risk-share under enhanced Trade Loan beyond 30 Sep 2022 for enterprises trading in nascent markets

 

INVEST IN OUR PEOPLE

Singapore Budget 2022 summaryINVEST IN OUR PEOPLE

  • SkillsFuture Enterprise Credit (SFEC) covers up to 90% of qualifying expenses e.g. job redesign, training courses
  • Expand SFEC to an additional 40,000 SMEs by waiving the Skills Development Levy contribution requirement

BETTER SKILLS MATCHING

  • $100 million to support NTUC to scale up Company Training Committees and introduce new grant to support companies’ transformation plans

SUPPORT FOR MID-CAREER WORKERS

  • SGUnited Mid-Career Pathways Programme — Company Attachment made permanent with full-time attachments and training allowances
  • New SkillsFuture Career Transition Programme to provide high-quality, industry-oriented training courses for jobseekers

ADJUSTMENTS TO FOREIGN WORKER POLICIES

  • Changes to Employment Pass
    • Raise minimum qualifying salaries to $5,000; $5,500 for financial services
    • For new applications from Sep 2022, and renewal applications from Sep 2023
  • Changes to S Pass
    • Raise minimum qualifying salaries to $3,000; $3,500 for financial services
    • For new applications from Sep 2022, and renewal applications from Sep 2023
    • Tier 1 levy raised to $650 in 2025
  • Changes to Work Permit for construction and process sectors
    • Lower Dependency Ratio Ceiling from 1:7 to 1:5 from 1 Jan 2024
    • New levy framework from 1 Jan 2024

 

 GST SUPPORT

$6.6 BILLION ENHANCED ASSURANCE PACKAGE

  • $700 to $1,600 cash payouts for Singaporean adults over next 5 years
  • $600 to $900 GSTV — Cash (Seniors’ Bonus) over next 3 years for eligible seniors aged 55 and above
  • $330 to $570 additional GSTV — U-Save rebates over next 4 years for eligible HDB households
  • $450 MediSave top-ups over next 3 years for Singaporean children aged 20 and below and seniors aged 55 and above
  • $400 Community Development Council (CDC) vouchers over 2023 and 2024 for Singaporean households

ENHANCED GST VOUCHER (GSTV) SCHEME

  • Service and Conservancy Charges (S&CC) Rebates (new component)
  • Increase Assessable Income threshold for GSTV — Cash from $28,000 to $34,000, benefitting more Singaporeans
  • Increase in GSTV Cash Payouts:
Annual Value of Home GSTV — Cash Payouts
$13,000 and below $500 (up from $300)
$13,001 to $21,000 $250 (up from $150)

 

 

SUPPORT FOR HOUSEHOLDS & COMMUNITY

Singapore Budget 2022 summaryIMMEDIATE SUPPORT FOR HOUSEHOLDS

  • $560 million Household Support Package
    • Double GSTV — U-Save rebates (up to $285 more for eligible HDB households) for the remaining quarters of 2022
    • $200 top-up to Child Development Account, Edusave Account or Post-Secondary Education Account for children aged 20 and below
    • $100 CDC Vouchers for all Singaporean households in 2022

BOOST RETIREMENT ADEQUACY

  • Continue next increase in CPF contribution rates for senior workers aged 55 to 70 in 2023 (including CPF Transition Offset)
  • Raise Basic Retirement Sum for those turning 55 in 2023 to 2027

INVEST IN OUR CHILDREN

  • Enhance Fresh Start Housing Scheme to better support second-timer families with children living in rental housing to purchase a flat
  • Scale up KidSTART programme nationwide
  • Expand into a nationwide UPLIFT Community Network to support more students in disadvantaged families
  • Integrate social service delivery, in tandem with Community Link scale-up to support more families with children living in rental housing

PREPARE FOR FUTURE HEALTHCARE NEEDS

  • Healthier SG – Bring healthcare closer and make it more accessible to the community
  • Closer partnerships between healthcare clusters and community partners
  • Enhance and integrate mental health and social services

CARING AND INCLUSIVE SOCIETY

  • Launch Enabling Masterplan 2030 to strengthen support for persons with disabilities in areas like employment, lifelong learning, and respite care
  • $100 million top-up to Enhanced Fund-Raising Programme until end-FY2024 to match eligible donations
  • $26 million top-up to Charities Capability Fund to help charities do more for the community
  • Extend One Team Singapore Fund for 5 years to match donations to High Performance Sports
  • $150 million top-up for 3 years to Cultural Matching Fund to match donations to Arts and Heritage charities

UPLIFT LOWER-WAGE WORKERS

  • Extend Progressive Wage Model to retail, food services, and waste management sectors; and to other occupations, e.g. in-house cleaners, administrators, and drivers
  • Companies employing foreign workers required to pay local employees at least the Local Qualifying Salary, currently $1,400 per month
  • Co-fund wage increases of lower-wage workers between 2022 and 2026 under the Progressive Wage Credit Scheme

 

Year Wage increase
2022 – 2023 50%
2024 – 2025 30%
2026 15%

 

  • Enhance Workfare Income Supplement to boost wages of lower-wage workers
    • More workers benefit with higher qualifying income cap of $2,500 per month
    • Extend to workers aged 30 to 34
    • New minimum income criterion: $500
    • Higher maximum annual payouts of $2,100 to $4,200

 

ADVANCE OUR GREEN TRANSITION

Singapore Budget 2022 summaryNET ZERO AMBITION

  • Raise Singapore’s ambition to achieve net zero emissions by or around mid-century

SINGAPORE GREEN PLAN

  • Green growth opportunities and jobs e.g. green finance, carbon services
  • Increase public sector green bonds issuance to $35 billion by 2030; publish Singapore Green Bond Framework by 2022
  • Accelerate adoption of Electric Vehicles by having more charging points near homes

CARBON TAX

  • Carbon tax rate adjustments:
Year Rate (per tonne)
Current $5
2024 – 2025 $25
2026 – 2027 $45
By 2030 $50 to $80

 

  • Allow carbon tax-liable businesses to use carbon credits to offset up to 5% of taxable emissions from 2024
  • Transition framework to help emissions-intensive, trade-exposed sectors manage near-term impact on business competitiveness
  • More details on support for households to be announced next year e.g. additional U-Save rebates

 

A FAIRER & MORE RESILIENT TAX SYSTEM

CORPORATE INCOME TAX

  • Explore a top-up tax called the Minimum Effective Tax Rate (METR) regime, in line with the global minimum effective tax rate under the Base Erosion and Profit Shifting (BEPS) 2.0 Pillar 2
  • IRAS will consult the industry on the design of the METR

PERSONAL INCOME TAX

  • Increase in top marginal tax rate from Year of Assessment 2024:
Portion of

Chargeable Income

 Tax Rate
In excess of $500,000 up to $1 million 23% (up from 22%)
In excess of $1 million 24% (up from 22%)

 

PROPERTY TAX

  • Increase in marginal tax rates from 2023 in two steps. The rates from 2024 are:
    • Non-owner-occupied residential properties:
      12%-36% (up from 10%-20% currently)
    • Owner-occupied residential properties for the portion of annual value in excess of $30,000: 6%-32% (up from 4%-16% currently)

ADDITIONAL REGISTRATION FEE (ARF)

  • Higher ARF rates for luxury cars
  • Additional ARF tier for cars at a rate of 220% for the portion of Open Market Value in excess of $80,000
Open Market Value ARF Rate
First $20,000 100%
Next $30,000 140%
Next $30,000 180%
Above $80,000 220%

 

Singapore Budget 2022 summary

GOODS AND SERVICES TAX (GST)

  • GST increase will be delayed to 2023 and staggered over two steps:
Time Period GST Rate
From 1 Jan 2023 8%
From 1 Jan 2024 9%
  • To cushion the impact of the GST increase:
    • $6.6 billion enhanced Assurance Package for all Singaporeans
    • Enhanced permanent GSTV scheme for lower- to middle-income households
    • No increase in Government fees and charges for 1 year from 1 Jan 2023
    • Continue to absorb GST for publicly-subsidised healthcare and education
    • Additional $15 million per year for Town Councils to absorb additional GST payable on Service and Conservancy Charges
    • Productivity Solutions Grant for businesses to apply for subsidised accounting and point of sale solutions