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Singapore Budget 2023 Summary

Singapore Budget 2023Dear Reader,

Welcome to our Singapore Budget 2023 summary.

The following is the Budget 2023 Summary announced by Deputy Prime Minister and Minister for Finance, Mr. Lawrence Wong in his Budget Statement for the Financial Year 2023 which was delivered in Parliament on Tuesday, 14 February 2023.

 

SUPPORT MEASURES FOR SINGAPOREANS

The Government is helping Singaporeans cope with the increase in daily expenses due to higher inflation and GST increase.

Singaporeans can benefit from the following measures in 2023:

 

For individuals

Cash
Age 21 to 54 Up to $1,700
Age 55 & above Up to $2,300
MediSave Top-Ups
Age 20 & below $150
Age 55 & above $150 – $600
Child Development Account Top-Up $400
Edusave Account & Post-Secondary Education Account Top-Ups $300

 

For households

CDC Vouchers $300
U-Save Rebates $440 – $760
S&CC Rebates 1.5 – 3.5 months

 

Support will be available all year round:

January 2023
CDC Vouchers
[Assurance Package (AP)* & Oct 2022 COL Package]		 $300
U-Save Rebates
[GST Voucher (GSTV) Scheme# & AP]		 $110 – $190
S&CC Rebates [GSTV] Up to 0.5 months
February 2023
Seniors’ Bonus Cash [AP] $200 – $300
MediSave Top-Ups [AP] $150
April 2023
U-Save Rebates [GSTV & AP] $110 – $190
S&CC Rebates [GSTV] 0.5 – 1 month
May 2023
Edusave Account & Post-Secondary Education Account Top-Ups [AP] $300
June 2023
Cash [AP] Up to $400
Seniors’ Bonus Cash [AP] $200 – $300
July 2023
U-Save Rebates [GSTV & AP] $110 – $190
S&CC Rebates [GSTV] 0.5 – 1 month
August 2023
Cash [GSTV] $350 / $700
MediSave Top-Ups [GSTV] $150 – $450
September 2023
Child Development Account Top-Up [AP] $400
October 2023
U-Save Rebates [GSTV & AP] $110 – $190
S&CC Rebates [GSTV] 0.5 – 1 month
December 2023
Cash [AP] $200 – $600

 

*The AP cushions the impact of the GST increase for all Singaporeans. It has been enhanced from $6.6 billion to $9.6 billion in 2023 to account for higher inflation, and to provide additional one-off support to Singaporeans to address immediate cost-of-living concerns up till 2027.

#GSTV: The permanent GSTV Scheme provides continuing help to defray GST expenses of lower-to middle-income Singaporean households beyond the transitional support provided by the AP.

 

SUPPORTING BUSINESSES

Developing Local Enterprises

  • Set aside $1 billion to provide customised support for promising local companies under Singapore Global Enterprises initiative
  • Additional $150 million via SME Co-Investment Fund to invest in promising SMEs

 

Building Capabilities and Anchoring Quality Investments

  • Top up $4 billion to National Productivity Fund and expand scope to support investment promotion

 

Nurturing and Sustaining Innovation

  • Introduce Enterprise Innovation Scheme to support businesses’ innovation activities via enhanced tax deductions/allowances, with a cash conversion option

 

To encourage businesses to engage in R&D, innovation and capability development activities, the following suite of tax measures will be enhanced or introduced:

  • Enhance the tax deduction to 400% for the first $400,000 of staff costs and consumables incurred on qualifying R&D projects conducted in Singapore for each YA from YA2024 to YA2028.
  • Enhance the tax deduction to 400% for the first $400,000 of qualifying IP registration costs incurred per YA from YA2024 to YA2028.
    • Enhance the tax allowance/deduction to 400% for the first $400,000 (combined cap) of qualifying expenditure incurred on the acquisition and licensing of IP rights per YA from YA2024 to YA2028. This enhancement will only be available to businesses that generate less than $500 million in revenue in the relevant YA.
    • Enhance the tax deduction to 400% for the first $400,000 of qualifying training expenditure incurred on qualifying courses (i.e. courses that are eligible for SkillsFuture Singapore (SSG) funding and aligned with the Skills Framework) per YA from YA2024 to YA2028.
  • Introduce a 400% tax deduction for up to $50,000 of qualifying innovation expenditure incurred on qualifying innovation projects carried out with polytechnics, the Institute of Technical Education, and other qualified partners per YA from YA2024 to YA2028.
  • Allow businesses to, in lieu of tax deductions/allowances, opt for a non-taxable cash payout at a cash conversion ratio of 20% on up to $100,000 of total qualifying expenditure across all qualifying activities in (a) to (e) above per YA. The cash payout option will be capped at $20,000 per YA, and will only be available to businesses which have at least three full-time local employees (Singapore Citizens or Permanent Residents with CPF contributions) earning a gross monthly salary of at least $1,400 in employment for six months or more in the basis period of the relevant YA.

 

Dealing with Cost Pressures

  • Extend Enterprise Financing Scheme enhancements till 31 Mar 2024 to facilitate access to credit:
    • 70% Government risk-share for trade loans
    • Enhanced maximum quantum for trade and working capital loans
    • Support for domestic construction projects via project loans
  • Extend Energy Efficiency Grant till 31 Mar 2024 for SMEs in Food Services, Food Manufacturing, and Retail sectors to adopt energy-efficient equipment, given higher electricity prices

 

SUPPORTING WORKERS

Integrate Training and Job Placement

  • Pilot Jobs-Skills Integrators in Precision Engineering, Retail, and Wholesale Trade sectors to bring together key players to develop industry-relevant training and facilitate job matching

 

Enhance Employment Support

Integrate Training and Job Placement

  • Pilot Jobs-Skills Integrators in Precision Engineering, Retail, and Wholesale Trade sectors to bring together key players to develop industry-relevant training and facilitate job matching

 

Enhance Employment Support

  • Top up $2.4 billion to Progressive Wage Credit Scheme fund for lower-wage workers, and maintain higher Government co-funding share of eligible wage increases in 2023:
    • Wages up to $2,500: increase from 50% to 75%
    • Wages above $2,500 and up to $3,000: increase from 30% to 45%
  • Extend Senior Employment Credit and Part-time Re-employment Grant for senior workers till 2025 to continue providing wage offsets, and encourage employers to offer flexible work arrangements and structured career planning
  • Enhance Enabling Employment Credit to encourage employment of persons with disabilities
  • Introduce Uplifting Employment Credit to encourage employment of ex-offenders

 

BUILDING A SINGAPORE MADE FOR FAMILIES

  • Extend $3,000 Baby Support Grant for eligible Singaporean children born from 1 Oct 2022 to 13 Feb 2023
  • For all other eligible Singaporean children:

 

Born on 14 Feb 2023 – 31 Dec 2023 1 Jan 2024 onwards
Cash Support
  • Increase in Baby Bonus Cash Gift by $3,000
  • Increase in Government contributions to the Child Development Account (CDA)

– Increase First Step Grant by $2,000
– Increase Government co-matching cap for CDA by $1,000 for the first and second child
Government-Paid Paternity Leave

2 weeks

4 weeks (increase 2 weeks on a voluntary basis)
Working Mother’s Child Relief (WMCR)
1st child

15% of mother’s earned income

$8,000
2nd child

20% of mother’s earned income

$10,000
3rd child and beyond

25% of mother’s earned income

$12,000

^ No change for WMCR claims on qualifying Singaporean children born or adopted before 1 Jan 2024

  • For all Singaporean children aged under 2 years from 1 Jan 2024 onwards: Increase Unpaid Infant Care Leave from 6 to 12 days per year for each parent
  • Provide more support to specific groups of First-Timer families to secure a BTO flat
  • Increase CPF Housing Grant by up to $30,000
    • Up to $190,000 in total for eligible First-Timer families purchasing resale HDB flats
  • Lapse Foreign Domestic Worker Levy Tax Relief from Year of Assessment 2025, in view of the concessionary migrant domestic worker levy that benefits all families who need help with caring for their dependents

 

SUPPORTING LOWER-INCOME FAMILIES

  • Scale up KidSTART to support positive development outcomes for children
  • Leverage ComLink to integrate delivery of social services
  • Top up $300 million to ComCare Endowment Fund to provide necessary social assistance to lower-income families

 

PROVIDING ASSURANCE IN OUR SILVER YEARS

Support Long-Term Care and Healthcare Needs

  • Top up $500 million to ElderCare Fund to support means-tested subsidies for seniors who need home-based, centre-based, or institutional care
  • Top up $1.5 billion to MediFund to strengthen safety net for lower-income individuals and seniors facing financial difficulties with medical bills

 

Strengthen Retirement Adequacy

  • Provide CPF Transition Support to lower-income Platform Workers in the first four years of implementation, to cushion the impact of their increased CPF contributions
  • Increase CPF contribution rates for senior workers in 2024 and provide CPF Transition Offset to employers
  • Increase minimum CPF monthly payouts for seniors on Retirement Sum Scheme to $350
  • Increase CPF monthly salary ceiling from $6,000 to $8,000 by 2026

 

Building Organisational Capabilities

  • Build organisational capabilities within the public service by putting in place a more comprehensive system to train public servants, mobilise and cross-deploy them for various crisis roles based on their skillsets and expertise
  • Tap on the capabilities of the private and people sectors in responding to crisis

 

Ensuring Economic and Infrastructure Resilience

  • Build up resilience in our economy and supply chains through diversification of import sources, stockpiling of food and essential items, and local production
  • Review stockpiling strategies and improve diversification of critical supplies
  • Design buildings to serve both peacetime and crisis functions, where possible

 

Safeguarding our Climate Resilience

  • Accelerate low-carbon transition for our economy and society, to achieve net zero emissions by 2050
  • Take steps to adapt to global warming and rising sea levels

 

Our Resilience as a People

  • Extend 250% tax deduction for donations to Institutions of a Public Character (IPCs) and eligible institutions to end-2026 to encourage giving
  • Enhance Corporate Volunteer Scheme to deepen partnerships between businesses and IPCs
    • Extend to end-2026 and expand eligible activities
    • Double the claims per IPC to a cap of $100,000 per calendar year
  • Review salary benchmarks and raise salary guidelines for the social service sector to attract and retain talent
  • Top up Community Silver Trust by $1 billion to support social service agencies that deliver community care services to seniors through dollar-for-dollar donation matching
  • Provide a $10 million top-up to support Self-Help Groups over the next three years

 

Corporate Income Tax

  • Base Erosion and Profit Shifting Initiative (BEPS 2.0)
  • Implement Global Anti-Base Erosion (GloBE) rules under BEPS Pillar 2 and Domestic Top-up Tax (DTT) for large Multinational Enterprise (MNE) groups from businesses’ financial year starting on or after 1 Jan 2025
  • Will monitor international developments and adjust as needed if there are delays
  • Update industry development schemes to ensure that Singapore remains competitive in attracting and retaining investments

 

Vehicle Tax

  • Higher marginal Additional Registration Fee (ARF) rates for higher-end and luxury cars
  • Portion of Open Market Value in excess of $40,000 and up to $60,000 will be taxed at 190%; in excess of $60,000 and up to $80,000 at 250%; and in excess of $80,000 at 320%
  • Cap Preferential ARF (PARF) rebates at $60,000

 

Buyer’s Stamp Duty and Additional Conveyance Duties for Buyers

  • Increase Buyer’s Stamp Duty (BSD) rates for higher-value properties, with effect from 15 Feb 2023:
  • For residential properties, the portion of the property value:
    • In excess of $1.5 million and up to $3 million will be taxed at 5% (up from 4%)
    • In excess of $3 million will be taxed at 6% (up from 4%)
  • For non-residential properties, the portion of the property value:
    • In excess of $1 million and up to $1.5 million will be taxed at 4% (up from 3%)
    • In excess of $1.5 million will be taxed at 5% (up from 3%)
  • BSD rates on or before 14 Feb 2023 will apply for eligible transitional cases
  • Additional Conveyance Duties for Buyers, which applies to qualifying acquisitions of equity interest in property holding entities, will be adjusted accordingly

 

Tobacco Excise Duty

  • Increase excise duty on tobacco products by 15%