Table of Contents Ministry of Finance (MOF)
The Ministry of Finance (MOF)’s mission is to create a better Singapore through Finance.
A total budget of $683.69 million (excluding Expenses on Investments) has been allocated to MOF in FY2010 to achieve this mission.
MOF aims to achieve the following outcomes:
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Sound Public Finances
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Growth with Opportunity for All
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High Performance Government
Sound Public Finances
MOF ensures that the Government’s fiscal position is sustainable over the medium and long term. MOF also ensures that Singapore’s reserves are optimally managed to balance the present and future financial needs of Singapore.
Shifting to a Progressive Property Tax Regime
The Government will shift to a progressive property tax regime for owner-occupied residential property. Together with a progressive income tax system and a flat GST that everyone pays, this will form a fair system of taxes in Singapore. For property tax payable from January 2011, the existing 1994 property tax rebates will be replaced by three tiers of property tax rates for owner-occupied residential properties: 0% for the first $6,000 of Annual Value (AV), 4% for the next $59,000 of AV, and 6% for the balance of AV in excess of $65,000. The new property tax system will benefit most Singaporeans.
Growth with Opportunity for All
MOF aims to create a pro-enterprise environment by keeping taxes competitive, facilitating trade and business creation, and encouraging innovation. MOF will also create opportunities for a better life for all, and build a strong community. To achieve this outcome, MOF will be undertaking the following major initiatives and programmes:
National Productivity Fund
The Government will create a National Productivity Fund to provide funding for productivity initiatives which are customised to specific industries, clusters and enterprises. The Fund will provide grants to help enterprises in all sectors, with special emphasis initially on sectors where there is potential for larger gains in productivity. The Fund can also serve to develop centres of expertise for a range of industries, which will provide a knowledge base for enterprises to tap on to develop productivity solutions.
The Government targets to put $2 billion into this new Fund. To begin with, the Government will put $1 billion into the Fund in FY2010, which it expects to be able to support initiatives over the next five years.
Productivity and Innovation Credit
The Government will introduce the Productivity and Innovation Credit to spur a much broader range of innovative activities through more generous tax benefits.
The Credit will cover six activities along the innovation value chain (namely research and development done; acquisition of intellectual property (IP); registration of IP; investments in design; spending on equipment and software to automate processes; and workers’ training).
All businesses will be eligible for the Credit, based on the expenditure they incur in any of the activities. They can deduct 250% of their eligible expenditures on each of these activities from their taxable income, with a cap of $300,000 expenditure per activity. This will be effective from Year of Assessment (YA) 2011 to YA 2015.
Tax Allowance to Defray Acquisition Costs
The Government will introduce, for five years, a one-off tax allowance to help defray a portion of acquisition costs for qualifying Mergers and Acquisitions (M&As). The allowance will be 5% of the value of the qualifying M&A deal, capped at $5 million and will be written down over five years. The M&A allowance will be granted to qualifying M&As executed from 1 April 2010 to 31 March 2015 (both dates inclusive).
Reduce GST Compliance Costs
We will introduce several GST-related changes to ease compliance costs for businesses. To ease import GST cash flow for importers, approved businesses will be allowed to defer their import GST payments for at least a month. The scheme will take effect from 1 October 2010. The Government will also simplify the rules for the accounting of GST to the earlier of the date of payment or the date of invoice. This will reduce administrative costs for most businesses, particularly smaller traders, as they no longer need to track the date of delivery of goods or performance of services. The changes will take effect from 1 January 2011.
Withholding Tax for Public Entertainers
The Government will reduce the withholding tax rate for non-resident public entertainers from 15% to 10% on their gross income derived in respect of services performed in Singapore. This reduction will help local organisers to attract more internationally-rated acts and performances to Singapore. The 10% tax rate will take effect from 22 February 2010 and will end on 31 March 2015.
Catalyse Growth Capital through Co-Investment
The Government will catalyse financing for companies that have achieved initial success and are looking to scale up. To provide a significant boost, the Government will mobilise up to $1.5 billion of growth capital by seeding a range of funds over 10 years, for which the Government will contribute up to half the capital. The programme will be implemented in phases with the first phase to be launched this year.
Leading centre for Financial Reporting Development
The Government, through the Accounting Standards Council, aims to establish Singapore as the leading international centre for the development of Financial Reporting Standards that are based on sound accounting principles and accurately reflect the economic realities of doing business in our marketplace. This, together with the Government’s effort to develop the accountancy sector, will help transform Singapore into a leading global accountancy hub in Asia.
Enhancing Parent Relief
To provide greater recognition for those who are looking after parents, grandparents and great-grandparents, the parent relief will be increased from $5000 to $7000 for taxpayers who are staying with their dependants and from $3500 to $4500 for taxpayers who are not staying with their dependants. Parent relief for taxpayers who are staying with their handicapped dependants will be increased from $8000 to $11000 and from $6500 to $8000 for taxpayers who are not staying with their handicapped dependants. These changes will be implemented from YA 2010.
Renaming Wife Relief to Spouse Relief
With effect from YA 2010, the Government will allow wives who are taxpayers to claim a spouse relief of $2,000, similar to the current scheme for husbands. This will help families where the wife is the breadwinner, for instance, where the husband has retired. Accordingly, the wife relief will be renamed as “spouse relief.”
Raising of Income Threshold of Dependants for Taxpayers to Claim Dependant-Related Reliefs
The Government will increase the income threshold for dependant-related reliefs from $2,000 to $4,000. In recognition of the extra resources and attention needed in providing care for the disabled, the Government will also remove the income threshold for handicapped dependant-related relief. The changes for the dependant-related reliefs will be implemented from YA 2010, except for the CPF Cash Top-up Relief for top-ups to the CPF accounts of spouse and siblings (for which the changes to the income threshold will be effective from YA 2011).
Extending Tax Deduction for Donations
In Budget 2009, the tax deduction for donations made in 2009 to Institutions of Public Character (IPCs) and other approved institutions was increased from 200% to 250%. The Government will extend this measure for an additional year, to give additional support to charitable giving.
Top-up to Central Provident Fund-Medisave Accounts (CPF-MA)
The Government will provide a one-off top-up to the CPF-Medisave Accounts of older Singaporeans.
Top-up to Post-Secondary Education Accounts
The Government will further top-up the Post-Secondary Education Accounts (PSEA) of young Singaporeans.
Tote Board Donations
Tote Board is committed to channelling its surpluses to make Singapore a better and safer place to live in. It supports national infrastructure projects such as Active Beautiful and Clean (ABC) Waters Programme and Gardens by the Bay. Public awareness campaigns on road safety, crime prevention, problem gambling and the Yellow Ribbon Project are substantially funded by Tote Board's surpluses. Going forward, Tote Board will continue to pursue capacity building initiatives for the social service sector so as to bring about improved social services to help the needy and disadvantaged in our community. Initiative to promote better optimisation of resources among non-profit organizations is an area constantly explored by Tote Board as well.
High Performance Government
Through various policies and systems, MOF ensures that resources are utilised in an efficient and effective manner to achieve the Whole-of-Government (WOG) outcomes, and actively promotes inter-ministry collaboration and integration. MOF also supports innovation in the Government to support public policy and improve service delivery. In this regard, MOF will be undertaking the following initiatives and programmes:
Effective and Efficient Use of Resources
The Government will continue to stretch our finite resources and get the best value for money. The Government is consolidating the various operational and administrative processes as well as centralising them to reap economies of scale while allowing autonomy of decision where it is most efficiently made. MOF will adopt a strategic procurement perspective and leverage on government procurement to help build up our suppliers’ capacity and productivity support our long-term economic growth. MOF also conducts value-for-money reviews to systemically examine whether expenditures are achieving the intended outcomes and doing so in a cost-effective way.
Enhanced WOG Organization and Collaboration
The Government will continue to nurture a “WOG mindset” among public officers, and foster a collaborative environment by enhancing policies for better integration, providing tools and resources to support cross-agency collaboration and recognising contributions to WOG efforts.
Enhancing Capacity & Synergy within the Public Sector
Government agencies are working together to develop shared IT systems for functions such as human resource, finance and procurement to reap economies of scale and learn from leading practices in the public and private sectors. The Government is also looking at streamlining its workflow processes across agencies to increase operational efficiency and bring about more coordinated service delivery to customers.
Increasing the Reach & Richness of e-services
The Government is enhancing the eCitizen portal to provide a more user-friendly platform to deliver integrated and personalized information and services to citizens.
Advancing Leading Ideas to be In Time for the Future
The Government is looking at the next wave of e-Government innovation in public service delivery. One possibility is to harness the power of the masses, and get the private and people sectors involved in identifying, developing and delivering services that meet their needs. The Government could evolve its role from being a sole provider of public services, to a platform provider which sets and referees the rules in an ecosystem to allow the private sector and individuals to freely innovate and create value-added services. The role of citizens would similarly shift from passive consumers, to active participants.
To find out more about the Ministry of Finance and our initiatives, please feel free to visit our website.
