New Singapore Shares

IMPACT OF NSS & OTHER OFF-BUDGET MEASURES

Impact on Small and Medium Enterprise

ABC is a realty company with an office at Henderson Road. For YA 2001 and 2002, the company makes taxable profit of $50,000 per year. The annual value of the property for the years 2001 and 2002 is $75,000.

• Income tax. Before the introduction of the off-Budget package on 12 Oct 2001, ABC has to pay income tax of$12,750 in YA 2001 and $5,512.50 in YA 2002. With the corporate tax rebate, ABC’s corporate tax payable is reduced to $6,375 in YA 2001 and $5,236.87 in YA 2002.
  
  

• Property tax. Before the introduction of the off-Budget package on 12 Oct 2001, ABC has to pay property tax of $7,125 in 2001 and $7,500 in 2002. With the property tax rebate, ABC’s property tax payable is reduced to $3,375 in 2001 and nil in 2002.
  
  

• Petrol Duty and Vehicle Rebate. In addition, the reduction in petrol excise duty from 40% to 35% and the provision for a one-time rebate for cars, taxis, goods vehicles, etc will help ABC keep the transportation costs down.
  
  

• LEFS. Furthermore, the Government will enhance the Local Enterprise Finance Scheme to allow local enterprises like SMEs (such as ABC) to have easier access to funds
  
  

ABC will enjoy total corporate tax savings of $6,650.63 and total property tax savings of $11,250.00. The rebates will result in total tax savings of $17,900.63, a 54.4% reduction in the total corporate and property taxes that ABC is required to pay.