The much anticipated Singapore Budget of 2019 was conducted yesterday by our Singapore Finance Minister Heng Swee Keat, which was widely followed amongst Singaporeans and Resident Individuals.
I noted some of the changes related to some of the tax concessions which I am interested in:
1.) Personal Income Tax Rebate For YA 2019
As part of the Bicentennial Bonus, the government has given a personal income tax rebate of 50% (capped at $200) for all tax resident individuals for the Year of Assessment (YA) 2019 (income year 2018).
This means that if you have a tax payable of $300, then you will be entitled for a 50% x $300 = $150 rebate. Thus, your net tax payable will be $300 – $150 = $150.
However, if you have a tax payable of $1,000, then your entitlement for the rebate will be capped at $200. Thus, your net tax payable will be $1,000 – $200 = $800.
2.) Greater Flexibility On Grandparent Caregiver Relief Claim From YA 2020 Onwards
To provide greater support and recognition to working mothers with handicapped and unmarried dependent children, the government has allowed greater flexibility on the Grandparent Caregiver Relief in respect of a handicapped and unmarried dependent child, regardless of the child’s age.
This is effective YA 2020 onwards.
Before that, the previous condition was to have the children age to be capped at 12 years and below.
3) NOR Scheme Lapsed From YA 2020 Onwards
The NOR Scheme was previously introduced in the year 2002 with the objective of attracting expats talent to relocate into Singapore.
Under the existing scheme, an individual taxpayer that qualified for the NOR scheme will be able to obtain tax concession in respective of his time apportionment outside of Singapore and will not be subject to tax on this portion.
Under the new rules, the NOR scheme will lapse after YA 2020 onwards, which means the last NOR status granted to an individual will be for YA 2020, which will expire in 5 years time in YA 2024.
4.) Income Tax Concession For S-Reits Extended Until 2025
Under the current regime, S-Reits are granted tax transparency if their trustees distribute at least 90% of their taxable income to unitholders in the same year the income is derived.
The current concession are scheduled to lapse in March 2020 and for income investors like myself, we are glad to hear that this concession will be extended for a further 5 years until Dec 2025 after yesterday’s budget.
5.) GST To Be Raised To 9% From 2021 Onwards
Singapore Finance Minister Heng Swee Keat confirmed in the budget yesterday that the government will be raising the Goods and Services Tax (GST) by two percentage points from the current 7% to 9% from the year 2021 onwards.
In order to mitigate the increase, the lower income households that qualify will be given vouchers based on the income household they are earning.
The scheme will be progressive in nature.
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