Creating Opportunity, Building Community

FOR INDIVIDUALS

Personal income tax reductions [$150 million in YA2006 and $310 million in YA2007]

• Top personal income tax rate lowered from 22% to 21% with effect from YA2006, and further reduced to 20% in YA2007. Marginal tax rates of all other brackets also reduced.

Edusave top-ups [$50 million]

• Edusave top-ups of $100 for all primary and secondary school students.

Medisave top-ups [$320 million]

• Medisave top-ups ranging from $50 to $350, depending on age.

Medifund top-up [$100 million]

CPF top-ups for older Singaporeans [$80 million]

• $100 top-up to the CPF Special or Retirement Accounts of Singaporeans aged 50 and above.

Baby Bonus Scheme enhancements

• Co-saving contributions up to the co-savings limit allowed any time within the six year period.

• Expansion of range of uses of co-savings to include health insurance, and early intervention programmes for children with special needs.

Foreign maid levy reduction [$90 million]

• Foreign maid levy reduced by $50 per month.

Lifelong Learning Fund top-up [$500 million]

ComCare Fund top-up [$254 million]

Encouraging savings for retirement [$8 million]

• CPF voluntary contribution cap increased and aligned to the mandatory contribution cap.

• Tax relief cap for the self-employed to contribute to CPF increased to the tax relief cap for CPF contributions by employees.

• Criteria for CPF members to top up the Retirement Accounts of their parents and non-working spouses liberalised.

• Common contribution cap for the Supplementary Retirement Scheme (SRS), set at 17 months of the CPF salary ceiling.

Help households meet utilities cost [$62 million]

• Utilities-Save scheme for HDB households, with more for smaller house-types.

Discourage smoking

• Increase in excise duty on cigarettes from $293 to $352 per 1,000 sticks with immediate effect.

Reduce illegal horse-betting activities

• Horse betting duty changed from 12% of gross stakes to 25% of gross profits.

Give relief from stamp duties

• Remission of stamp duties paid on aborted transactions.

Encourage Philanthropy and Community Involvement [$23 million]

• Recognise the advancement of sport as a charitable purpose.

• Double tax deduction granted for donations with naming opportunities.

• Computer Donation Scheme extended to include computer hardware and software donated to Institutions of a Public Character (IPCs).

FOR COMPANIES

Develop Singapore as a premier wealth management centre

• Start-up fund managers given a 12-month grace period to meet the requirement that 80% of the value of their funds must come from foreign investors.

• Foreign charitable trusts given tax exemption on foreign income earned, without restrictions on expenditure levels or where funds may be spent.

Deepen and broaden capital markets

• 10% tax rate for income earned by approved companies in securities borrowing and lending, including intermediaries.

• Removal of double stamp duties for real estate mortgage financing structured in accordance with Islamic practices and concessionary tax treatment extended to payouts from “Islamic” bonds.

• New Commodity Derivatives Trading incentive offering concessionary tax rate on qualifying income from trading exchange-traded commodity derivatives.

Encourage Real Estate Investment Trusts (REITs) to list in Singapore

• Stamp duty for transfer of Singapore properties into listed REITs or REITs to be listed, will be waived for five years.

• Withholding tax on trust distributions reduced from 20% to 10% for five years.

Strengthen Singapore as logistics hub

• Bonded Warehouse Scheme expanded by lifting the 80% export requirement for qualifying operators.

• Approved International Shipping Enterprise (AIS) incentive extended to ship leasing companies.

• Global Trader Programme (GTP) widened to allow companies to use the Singapore dollar as their transacting currency.

Rejuvenate tourism and retail sectors

• $40 million invested over three years by Singapore Tourism Board (STB) to enhance Orchard Road.

• Investment Allowance incentive extended to flagship concept projects in retail, F&B and entertainment.

• Concessionary tax rate of 10% extended to event companies which bring in approved tourism events.

Help small businesses

• One-year loss carry-back for corporate taxes, subject to cap of $100,000 in losses carried back.

• All Government suppliers to be given one free Government e-procurement account.

Fine-tune foreign worker policies

• Skilled Foreign Worker Levy to be raised from $50 to $80 from 1 July 2005 and to $100 from 1 January 2006.

• Companies given flexibility to go above foreign worker dependency ceiling up to a higher limit, subject to a higher foreign worker levy of $500 for each extra foreign worker.