Budget 2018 Highlights

Yes, it’s that time of the year again. No, we’re not talking about Chinese New Year.

The time has come for us to dissect this year’s Budget to see what it entails for the next few years to come.

Here are the 6 highlights from Budget 2018 that Singaporeans should probably take note of.

We summarise what it means for you below.

1. GST hike

So the bad news is that the Goods & Service Tax (GST) hike is real and it will be raised by 2%, from 7% to 9%.

The good news is that the increased tax won’t roll around till 2021 to 2025.

Basically, try to get all your shopping done before that. Thankfully, e-commerce on physical goods below $400 have been spared from GST — for now.

2. GST for Imported Online Services

GST will kick in for imported online services as early as Jan 1, 2020.

What exactly does “imported online services” mean?

According to ChannelNewsAsia, this could mean video and music streaming services like Netflix or Spotify.

As well as electronic app marketplaces like Apple or Google, and even Microsoft Office 365’s productivity suite may be liable for taxation.

3. Enhanced Proximity Household Grant

For couples and singles looking at buying a swanky resale flat near your parents or children, our government has good news for you.

Houses located within 4km from your parents’ or childrens’ flats, will now be eligible for the Proximity Housing Grant (PHG).

PHG amounts have also been enhanced as follows.

  1. Families buying a resale flat to live with their parents and children enjoy $30,000 grant, up from $20,000.
  2. Singles buying a resale flat to live with their parents enjoy up to $15,000 grant, up from $10,000.
  3. Singles buying a resale flat to live near their parents enjoy up to $10,000 grant — in a brand new scheme.

4. Tobacco Tax

Unfortunately if you’re a smoker, things don’t look so good for the prices of cigarettes.

A 10% increase in Tobacco tax is expected. This means that your $12 pack of cigarettes will probably cost $13.20 now.

Time to consider switching to e-cigarettes? Oh wait, they’re banned.

5. Carbon Tax

In the lead up to Budget 2018, much has been said about Singapore’s impending Carbon Tax.

And as predicted, Budget 2018 will herald the introduction of this measure.

From 2019 to 2023, Carbon Tax: $5 per tonne of CO2 emitted.

In 2023, a review will be conducted as to how effective this tax has been.

From 2023 to 2030, Carbon Tax will probably be raised progressively to $10-$15 per tonne of CO2 emitted.

How does this affect households? Mr Heng assures everyone that the impact should be “small”.

However, the carbon tax will probably translate to higher electricity prices of about 0.21 cents per kWh, if these costs are passed on in full to consumers.

6. Ang Bao Bonus

Adult Singaporeans above the age of 21 years old, you can expect to receive a SG Bonus of up to $300, based on the following criteria.

SG Bonus Annual Income
$300 Less than $28k
$200 $28k-$100k
$100 Above $100k

If you own more than one property however, you’ll be eligible for SG Bonus of $100.

Budget life forever

Now that Budget 2018 has been announced, most Singaporeans are heaving a sigh of relief, albeit temporarily.

Fortunately, the dreaded GST hike will not be implemented until at least three years down the road.

Most importantly, online shopping on Taobao will also not be taxed.

Then again, we can’t be sure about what’ll be rolling around come Budget 2019.

Source

Featured image from MustShareNews.