While Singapore’s newly announced budget is filled with aid packages, credit schemes and public health spending, there were a few things consumers will definitely feel in their pockets.
While the government’s 2021 budget delivered today was peppered with cash handouts for things like groceries and COVID-19 aid, it also includes tax hikes that will affect most Singaporeans – while still running a S$11 billion (US$8 billion) deficit.
Among changes Finance Minister Heng Swee Keat announced today was extending the 7% duty on imported consumer goods to all purchases instead of only those over S$400, potentially driving up everyone’s online shopping expenses when it comes into effect in 2023.
“One aspect of a fair and resilient tax system is ensuring a level playing field for our local businesses vis-a-vis their overseas counterparts. This is especially relevant, as e-commerce for sales of goods and services is growing,” Heng said today.
Meanwhile, going to refill at the pump cost more the moment he opened his mouth. Heng said petrol tax increases were immediately hiked today, with intermediate petrol going up 10 cents to 66 cents per liter, while premium increased by 15 cents to 79 cents per liter. He said its meant to drive people off the road as part of ambitious new green plan goals to phase out internal combustion engines and encourage electric vehicles. All in the name of climate change, according to Heng.
“We will further discourage the use of internal combustion vehicles. Climate change is real and urgent. We must act now,” he said. The government plans to set aside S$30 million over the next five years for electric-vehicle related measures.
Motorcycle riders will be eligible for 60% road tax rebates starting in August while taxis and private hire drivers will receive S$360 spread out over four months. Commercial vehicle drivers or bus operators will receive full tax rebates for a year while petrol-powered car owners will get a measly 15% rebate for the same period.
This year’s deficit spending of S$11 billion will again be drawn from reserves, though that is significantly less than the amount drawn last year.
[#SGBudget2021: Household Support Package]
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Shopping money, COVID aid
Heng said he was setting aside S$900 million for Singaporean households, including S$100 vouchers for Singaporeans to spend at hawker centers and neighborhood shops. Most Singaporeans can also expect to receive S$200 while those with children will receive an additional S$200.
“I hope that these new vouchers can bring more businesses to our hawkers and heartland shops,” Heng said.
A bulk of the budget, worth over S$4.8 billion, will go into funding COVID-19 financial aid schemes such as the S$25-million Jobs Support Scheme that was intended to offset wages in pandemic hit sectors such as tourism, retail, the arts, and food.
The government plans to pump S$870 million into the aviation sector Heng said was running at only 2% of “pre-COVID levels” and another S$133 million to support taxi and private hire drivers. The arts and culture sector will get S$45 million, he said.
Last year, Singapore stashed nearly S$100 billion worth of cash payouts, rental and foreign worker levy waivers, and salary support to cope with the devastating economical impact of the pandemic.
“Last year, I addressed parliament nine times over four budgets, two ministerial statements and three budget roundups. This year, my new year wish is to have one budget,” he joked.
[#SGBudget2021: COVID-19 Resilience Package]
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