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No Tax Surprises In Singapore's 2019 Budget

Thursday, March 14, 2019

Singapore's recently released 2019 Budget included few significant tax announcements except confirmation that Singapore's carbon tax will be levied this year and the goods and services tax will be hiked in the medium term.

The Budget included announcements that donations to Institutions of a Public Character (IPCs) will qualify for a 250 percent tax deduction. Businesses will also enjoy a 250 percent tax deduction on qualifying expenditure when their employees volunteer or provide services to IPCs under the Business and IPC Partnership Scheme.

The Budget announces a 50 percent Personal Income Tax Rebate, subject to a cap of SGD200, for the Year of Assessment 2019, to provide relief to low- and middle-income taxpayers in particular.

Further, the Budget announces a doubling of excise duty on diesel from SGD0.10 to SGD0.20. To cushion the impact on companies, there will be a 100 percent road tax rebate for one year, and a partial rebate for two years, for commercial diesel vehicles.

On GST reform, the Budget document confirms that GST will be raised by two percent, from nine percent, on a date to be determined some time between 2021 and 2025.

When GST is raised, the increase in tax burden on low- and middle-income households will be reduced temporarily with an "offset package," the Government said.