A new package of measures designed to stimulate the ailing economy in Singapore was unveiled last week by the Deputy Prime Minister, Lee Hsien Loong, and contained heavy tax cuts for both businesses and individuals.
This latest package dwarfs the $2.2 billion programme announced in July, and includes many measures which are an extension of those previously announced. However, government predictions for the country's economic future are still gloomy, despite this second package, and it is thought that the economy may shrink by around 3% this year- its worst performance since 1964.
Although the proposed measures are divided into eight categories, and include property related measures, employment assistance for workers, and help for the country's lower income and unemployed citizens, the main emphasis is on corporate and individual tax cuts, and incentives for business. In his 12th October speech, Mr Lee explained the rationale behind this: 'We want to encourage enterprise,' he said, 'because the way to recover is for the private sector to create new opportunities and generate more wealth. We also want to reduce business costs, so that businesses can stay afloat and minimise job losses.'
Measures announced on Friday include:
- Corporate tax rebates of 50% on the first $25,000 of tax payable for the 2001 fiscal year and of 5% on any additional tax payable, followed by a rebate of 5% for the following year.
- Reduction of the base corporate tax rate to 24.5%
- A further personal income tax rebate of 5%, bringing the total rebate for 2001 to 15%, and a cut in the base personal income tax rate, effective from 2002, as well as a further 10% rebate in that fiscal year.
- Fixed property tax rebate of $8,00 per year, plus further rebate of 30% on the balance payable, for all commercial and industrial property.
- Reduction in stamp duty rates of 30% on all instruments.
See the full text of the Singapore Government announcement in Tax-News Resources
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