It's time for Singapore's annual highlight - [Budget 2022]. This year, it was released by Finance Minister Huang Xuncai with the theme of "Joining Hands to Forge the Way Forward".
General overview of Singapore's economy
Singapore's economy is expected to recover steadily, and grow between 3% to 5% this year (2022), as it continues to benefit from the improvement of the global economy. Nonetheless, the global economy is still vulnerable to outbreak-related risks and further supply chain disruptions, so Singapore will continue to keep a close eye on potential threats and be ready to respond should the situation worsen.
The Singapore government has invested nearly S$100 billion in the past two years to support Singaporeans and local businesses. The close relationship between labor and management enables the three parties to make decisive decisions and act in a timely manner to maintain and create jobs in a crisis. The unemployment rate of Singapore's residents fell to 3.2%, close to pre-coronavirus levels.
Budget 2022 mainly has the following key points, which are closely related to us
1.The consumption tax will rise to 9% in 2023
The consumption tax hike is a major focus of this budget. GST will increase to 8% from January 1, 2023; and to 9% from January 1, 2024.
In order to prevent businesses from raising prices on the ground, the government will set up a committee to ban profiteering. The government will continue to pay GST for publicly subsidised health services and education.
2.Personal income tax increases are aimed at high-income groups
For chargeable income from 320,000 RMB to 500,000 RMB, the marginal personal income tax rate remains at 22%;
For taxable income above RMB 500,000 to RMB 1 million, the marginal tax rate will increase from the current 22% to 23%;
For taxable income above 1 million RMB, the marginal tax rate will be increased from 22% to 24%.
3.the following taxes will also increase:
Real estate taxes will be adjusted in two stages from 2023-
The real estate tax payable by owners of non-owner occupied dwellings will increase from the current 10% - 20% to 12% - 36%;
As for owner-occupie houses, the real estate tax for those with an annual value of more than 30,000 yuan will be raised from the current 4% - 16% to 6% - 32%.
In addition to GST and real estate tax, the cost of buying a luxury car in Singapore will also increase. Using additional registration fee as an example, if the on-shore value (OMV) of the car is more than 80,000 Singapore dollars, the additional registration fee rate for the part exceeding 80,000 will be raised from the current 180% to 220%.
4.In response to the increase in consumption tax, subsidies are granted.
The existing S$6 billion Assurance Package will add S$640 million to reduce the impact of GST:
Eligible senior citizens will receive a special GST cash grant of S$600-900;
All eligible HDB tenants will receive an additional rebate of S$330-570 on utility bills;
A subsidy of S$450 in the Medisave accounts of local children and seniors;
Each Singaporean household will receive a CDC Voucher of S$100 in 2022, and then S$200 in 2023 and 2024 each.
An additional S$200 grant will be given to the Education Savings Account of children under 21.
Double the rebate on utility bills and receive an additional grant of up to S$285.
5.Improve the standard of pass application
Starting from September 2022, the salary standard for EP applications will increase to SGD 5,000, the EP in the financial industry will increase to 5,500, the SP will increase to 3,000, and the SP in the financial industry will increase to 3,500.
In addition, the SP's poll tax will also be raised from the current minimum of S$330 to S$650 by 2025.
Regarding the WP Pass, the employment ratio of the construction industry and the processing industry has been reduced from the current 1:7 to 1:5. In other words, for every 1 local employee hired, 5 WPs can be hired.
6.500 million "employment and business assistance package"
Although the overall situation has improved, many industries still face challenges, such as catering, tourism, and retail. Therefore, an aid package worth S$500 million was launched to help tide over the crisis.
The package included the launch of the "Small Business Recovery Grant" (Small Business Recovery Grant) program, eligible small and medium enterprises, who employ at least? 1 local employee, will receive a subsidy of S$1,000 for each, with a limit of S$10,000.
Owners of hawker centres and coffee shops, even if they do not employ local staff, can also receive a subsidy of S$1,000.
Those whose income has decreased during the pandemic can also continue to apply for the "Coronavirus Recovery Subsidy", and the application date will be extended to the end of this year.
To encourage local recruitment, the Jobs Growth Incentive will be extended for half a year until September this year.
7.2billion progressive salary subsidy plan
In order to improve the quality of life of low-income groups, the government will fund companies to raise wages for this group from 2022 to 2026.
Salaries of S$2,500 and below will be subsidized by the government by 50% in the first two years, 30% in the third and fourth years, and 15% in the final year.
8.Enhanced Employment Subsidy Program Launched a progressive wage increase subsidy program
The government will strengthen the employment subsidy scheme to further assist low-wage workers. From January next year, the salary threshold for the employment subsidy scheme will increase from the current 2,300 yuan to 2,500 yuan per month. The scheme will also expand to include young workers aged 30 to 34, who can receive up to 2,100 yuan per year. As for employees aged 35 to 60, they can receive a subsidy of up to 3,000 yuan to 4,200 yuan per year.
9.About Provident Fund (CPF)
In order to ensure sufficient protection of retirement life, the contribution rate of provident fund will increase, but at the same time, certain subsidies will be given to employers to offset the extra provident fund that enterprises need to pay.
From 2023 to 2027, the basic deposit amount in the provident fund retirement account of people over 55 years old will increase by 3.5% per year.
