Monday, February 20, 2017

Budget 2017: 5 things that may affect you directly, AsiaOne Singapore News

Budget 2017: 5 things that may affect you directly, AsiaOne Singapore News

Budget 2017: 5 things that may affect you directly

SINGAPORE - Finance Minister Heng Swee Keat delivered his second Budget speech in Parliament on Monday (Feb 20), where he unveiled various measures aimed at helping businesses, workers and Singaporean households amid a tough economic climate.

Outlining the Government's budget position, Mr Heng said that a smaller budget surplus of S$1.9 billion, or 0.4 per cent of GDP, is expected this year.

In total, the Government will be providing additional support of over $850 million this year to help households with their expenses, though Mr Heng also stressed the need for growing revenues to fund increasing expenditure.

Here are five measures that are likely to affect Singaporeans directly.

1. This affects everyone: Water prices will increase by 30% over two years

Water prices are set to increase by 30 per cent in two phases starting July 1, 2017.

Mr Heng explained that prices needed to reflect the rising costs of producing water. The Government's efforts in building more desalination and NEWater plants have also made water more costly.

He added that for 75 per cent of households, the increase in monthly water bills will be less than $18 from July 2018. However, the Government will introduce measures to help lower and middle-class income households offset this increase.

This is the first time in 17 years that water prices have been revised.

2. Increase in GST Voucher rebate and new Personal Income Tax rebate

To offset the increase in water prices, there will be a permanent increase in the GST Voucher - Utilities-Save (U-Save) rebate for eligible HDB households.

The increases will range from $40 to $120 depending on the HDB flat type.

GST Voucher - Utilities-Save (U-Save) rebate for different types of households. Photo: Ministry of Finance

Lower-income households will also receive a one-off GST Voucher - Cash Special Payment of up to $200.

GST Voucher - Cash Special Payment eligibility chartPhoto: Ministry of Finance

To help residents with tax bills, there will be a Personal Income Tax Rebate of 20 per cent of tax payable, capped at $500, for income earned in 2016.

The Service and Conservancy Charges (S&CC) rebate will also be extended. Eligible households will get 1.5 to 3.5 months of S&CC rebates this year.

Photo: Ministry of Finance

3. This affects first-time home buyers: CPF Housing Grant increase

Couples who are buying a resale flat for their first HDB home will receive more subsidies from the Government.

First-timer couples who buy resale flats that are 4-room or smaller will get $50,000, up from the current $30,000.

Those buying resale flats that are 5-room or larger will receive $40,000, also up from $30,000.

Graphic: The Straits Times

4. If you're thinking of buying a motorcycle: Additional Registration Fees up

Motorcycle riders may soon need to pay higher taxes on their vehicles, following the introduction of a tiered Additional Registration Fee (ARF) system.

At present, all motorcycles incur an ARF of 15 per cent of their open market value (OMV).

But with the new system, the ARF for motorcycles with OMV of up to $5,000 will remain at 15 per cent, the next $5,000 will incur ARF of 50 per cent, while the remaining value over $10,000 will be subject to an ARF rate of 100 per cent.

Graphic: The Straits Times

The tiered ARF will apply to motorcycles registered from the second certificate of entitlement (COE) bidding exercise in Feb 2017.

However, Mr Heng noted that more than half of new motorcycle buyers will not be affected by the new system.

He added that the Transport Ministry will stop the contribution of motorcycle COE quota to the open category, as very few have been used to register motorcycles.

5. If you're a student: More bursaries for post-secondary education

Annual bursaries will rise up to $400 more for undergraduates, up to $350 for diploma students and up to $200 for students in the Institute of Technical Education (ITE).

Mr Heng added that existing bursaries already "more than cover" the course fees for ITE students.

Other than increasing bursary amounts, the income eligibility criteria will also be revised, enabling about 12,000 more Singaporean students to benefit and bringing the total number of beneficiaries to 71,000.

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