Tax Changes For Individuals

Personal Tax Rebate

In 1997, the Government gave a 10 per cent across-the-board rebate on individual income tax as a reward for individual effort and to share the budget surplus. Last year, despite the worsening economic conditions, the Government gave a 5 per cent rebate on individual income tax to provide a measure of relief to taxpayers. Although some signs of stability have emerged, there still remain critical uncertainties in the external environment. Nevertheless, I have decided to restore the personal tax rebate to 10 per cent for the Year of Assessment 1999, similar to 1997, in order to help taxpayers tide over this temporary difficult period. The estimated revenue loss to Government is $275 million.

Following the GST-related changes made to personal income tax, currently about 65 per cent of individuals no longer pay income tax and therefore would not benefit from the income tax rebate. To extend help to these individuals, the Government will grant the same rebates on HDB rentals and town council Service and Conservancy (S&C) charges as in 1997 to citizens staying in rented and owner-occupied HDB flats. The rebates will be as follows:

1. One-Room Flats
   Two months' net rent and three months' net S&C charges. The rental rebates will be made on 1 June and 1 September, and the S&C rebates will be made on 1 June, 1 September and 1 December this year.
2. Two-Room Flats
   One month's net rent and three months' net S&C charges. The rental rebate will be made on 1 June, and the S&C rebates will be made on 1 June, 1 September and 1 December this year.
3. Three-Room Flats
   Three months' net S&C charges. The S&C rebates will be made on 1 June, 1 September and 1 December this year.
4. Four-Room Flats
   One month's net S&C charges. The S&C rebate will be made on 1 June this year.
5. Five-Room Flats
   One month's net S&C charges, to be made on 1 June this year.

The estimated cost of these rental and S&C rebates is $39 million. The rebates will be given after deducting the GST offset rebates, the S&C grants associated with the utilities rebates and a special S&C monthly rebate, which I will now elaborate.