Singapore Budget 2011 in Summary

Minister for Finance Tharman Shanmugaratnam unveiled Singapore Budget 2011 on Friday in Parliament.

The announced package by the Minister included various payouts, top-ups, as well as tweaks to existing systems amongst other initiatives.

The following are some of the points of his Budget speech that I found more relevant and worth highlighting.

Economy

  • Economy has done well, record 14.5% GDP growth in 2010.
  • Recovery was faster than most economies; Outlook for US, Eurozone and Japan challenging with recovery expected to take at least another four years.

Outlook

  • Government expects Singapore’s economy to grow by between 4% to 6% in 2011.
  • 21,300 new skilled jobs to be created by investments in 2010 once projects are realised.

Dealing with Inflation

  • Inflation was 4.6% year-on-year in December 2010, expected to be around 3% to 4% in 2011.
  • Manage medium-term inflation through Singapore dollar exchange rate – SGD was allowed to appreciate over the last 18 months to counter inflation in imported goods However, sharp appreciations will disrupt export.
  • Government to monitor excessive price raises by businesses.
  • Greater subsidies for needy in health, education, housing etc.
  • Continue to grow Singaporeans’ incomes

Income and Retirement Schemes

  • Aim to raise incomes by 30% in real terms over next 10 years.
  • One-off 50% more Workfare Income Supplement in 2010, 25% more in 2011 and 2012, payable in cash.
  • Employer’s CPF contribution increased from 15.5% to 16%. Additional 0.5% to go to Special Account.
  • CPF Salary Ceiling to increase from $4,500 to $5,000 per month.
  • SRS contribution cap to increase from $11,450 to $12,750 for Singaporeans/PRs from 1st September 2011 onwards.

Tax

  • Lower income tax.
Current Tax Structure Tax Structure w.e.f. YA 2012
Chargeable Income ($) Tax Rate (%) Gross Tax Payable ($) Chargeable Income ($) Tax Rate (%) Gross Tax Payable ($)
On the first 20,000 0 0 On the first 20,000 0 0
On the next 10,000 3.5 350 On the next 10,000 2 200
On the next 10,000 5.5 550 On the next 10,000 3.5 350
On the next 40,000 8.5 3,400 On the next 40,000 7 2,800
On the next 80,000 14 11,200 On the next 40,000 11.5 4,600
On the next 160,000 17 27,200 On the next 40,000 15 6,000
In excess of 320,000 20 On the next 40,000 17 6,800
On the next 120,000 18 21,600
In excess of 320,000 20
  • Tax rebate of 20% capped at $2,000 for YA 2011.

Support for Children

  • Aged 6 and below to receive $300 to $400 in Children Development Accounts.
  • Subsidies for kindergarten available to more families up to $3,500 in monthly gross income.

CPF Medisave Top-Up

  • One-time top up of Medisave Account on 1st May 2011.
Assessable Income for Year of Assessment 2010 Annual value of Residence (as at 31st December 2010)
Up to $7,000 More than $7,000
Up to $30,000 Aged 45-49:
$300
Aged 50-59:
$400
Aged 60-69:
$500
Aged 70-79:
$600
Aged 80+:
$700		 Aged 45-49:
$200
Aged 50-59:
$300
Aged 60-69:
$400
Aged 70-79:
$500
Aged 80+:
$600

Growth Dividends

  • One-time cash payout on 1st May 2011
Aessable Income for YA 2010 Annual Value of Residence (as at December 2010)
Up to $7,000 $7,001 to $13,000 More than $13,000
Up to $30,000 $800 $600 $300
$30,001 to $100,000

$600
More than $100,000 $100
NSFs/NSmen +$100
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19th February 2011, Saturday 2:01 am Industry & News
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