Tax Changes For Individuals

Offset Package for Utilities Rates Revision

The Government had in June 1997 announced the revision of water tariffs and the water conservation tax to uniform flat rates for all users. There have so far been two increases in July 1997 and July 1998. The next increase is scheduled for 1 July 1999. Despite the economic downturn, we must press on with our water conservation efforts and raise water tariffs and conservation tax as planned.

The water tariffs, including conservation tax, will increase by 15.3 cents to 24.4 cents per cubic metre for domestic consumers. The non-domestic water rate will increase by 5.8 cents per cubic metre to reach the target rate of $1.52 per cubic metre. As part of the water conservation effort, the waterborne fee will also be raised as scheduled, by 5 cents per cubic metre for domestic consumers and 9 cents per cubic metre for non-domestic consumers with effect from 1 July 1999.

The Government will continue to help lower income households cope with the increases in water charges. In 1997 and 1998, a package of annual utilities rebates and monthly S&C grants were given to citizens living in 1 to 4-room HDB flats to offset the increases in electricity and water rates. To help the lower income groups cope with the economic crisis, the Government has already announced in November 1998 that the package of utilities rebates and monthly S&C grants given in 1997 and 1998 will be continued for another two years. The cost to Government is estimated at $73 million per year.

As water charges are scheduled to increase further in July 1999, the Government has decided to double the utilities rebates from $100 to $200 for 1 to 3-room HDB flats and from $50 to $100 for 4-room HDB flats in 1999. This will cost Government an additional $41 million, and is more than sufficient to offset the increase in water costs for lower income households.

The utilities rebates will be credited against the utilities bills of eligible households for the month of September which are payable in October. The balance of the rebate not consumed within the month will be carried over until it is fully used up. Grants for S&C charges to HDB lessees and tenants, ranging from $36 to $66 a year, will continue to be given. The grants will start from July 1999 and will be $3 per month for 1-room flats, $4 per month for 2-room flats, $5.50 per month for 3-room flats and $4 per month for 4-room flats. Those lower income groups which do not live in HDB flats and hence are unable to benefit from the utilities rebates and S&C grants can obtain help from the CCC Assistance Scheme.