| Increase CPF voluntary contribution
cap and tax relief cap for the self-employed
4.16 To encourage Singaporeans to save more for their
retirement, we will make changes to the CPF contribution
and the tax relief caps. With immediate effect, the
CPF voluntary contribution cap will be raised to, and
aligned with, the mandatory contribution cap of 17 months
of the CPF salary ceiling. Similarly, the contribution
rates will be aligned with the actual contribution rate
of 33%.
4.17 I will also raise the tax relief cap on voluntary
CPF contributions by the self-employed to align it with
the tax relief cap for employees. This will take effect
from YA2006. These measures send an important signal
to self-employed individuals that they too must take
active steps to put aside enough for their medical needs
through Medisave contributions and set aside more retirement
savings in their CPF accounts.
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