Key Budget Initiatives 2008 Budget of Singapore has addressed the needs of the business owners as well as households. The Finance Ministry has introduced several schemes and made many alterations for the benefit of the people of Singapore.
The write up below reveals the different areas, which were attended to by the Finance Minister in the recent budget. The FY 2007 proved to be a sound one for Singapore. In the budget of 2008, the Finance Minister laid stress on few aspects, which needed urgent attention. The key budget initiatives 2008 budget of Singapore encompasses the following.
The key budget initiatives in Singapore’s budget of 2008 may be categorized into the two broad heads :
Benefits that can be availed by the business owners
Benefits that can be availed by households as well as individuals.
Business Owner Benefits:
These can be sub-categorised as follows :
Benefits for all companies:
All firms will be able to enjoy tax deductions related to R&D expenses. The tax deductions increased to 150% from 100%.
Benefits for small and medium enterprises or SMEs:
The Finance Minister also extended tax allowance for all firms. This measure would mainly benefit the small and medium enterprises or SMEs. The incentive slated was 50% of first $300,000 of income, which is chargeable.
Benefits for start up businesses:
To avail this benefit, the prerequisite is that the company intending has to spend $150,000 for research and development projects in the country. This facility is usually availed by those companies who have not been able to register profits in 36 months.
Debt market promotion:
As part of the budget, the QDS or the Qualifying Debt Securities was renewed for another five years (2009 to 2013). Another measure taken by the Ministry for debt market promotion included exemption of taxes on income earned by dealers for trading Singapore Government Securities.
Asset Securitization promotion:
The scheme pertaining to Approved Special Purpose Vehicle for the period ranging between 1st January, 2009-31st December, 2013 was extended.
To promote funding of infrastructural developments, tax incentive package was extended to 31st December, 2011, which was previously valid till the year 2009.
Benefits for Households as well as Individuals:
GDs or Growth Dividends:
GDs pertaining to share surpluses will be extended to people fulfilling the following conditions:
For Singaporeans in the age group 21 years or more in the year 2008. These individuals are required to belong to the middle as well as lower income households.
The individuals who had been associated with National Defense Services will be getting $100 GD in addition to the above.
It has been estimated that owing to the GD, the government will be incurring an expenditure of $865 million.
Rebates on Personal Income tax or PIT:
The tax rate remained the same at 20% for a maximum amount of $2000. The government will be incurring an expenditure of $380 million for the same.
Life Bonus or L Bonus:
This scheme has been announced as part of the budget 2008 proceedings. This is a scheme, which has been propounded so that the Singaporeans receive a continuous supply of income so long as they are alive. This scheme is applicable for Singaporeans who are of the age 55. Another criteria is that they are required to have $40,000 as CPF Minimum Sum.
In other words, the Finance Minister attended to all facets of the requirements of the people thereby making the country’s global presence felt(by making it competitive) and being prepared for all the uncertainties, which may arise in the near future.