Table of Contents
Security and External Relations
Ministry of Finance
Ministry of Finance (MOF)
The mission of MOF is to create a better Singapore through Finance. A total budget of $824.9 million, excluding expenses on investments (EOI), has been allocated to MOF in FY2012 to achieve this mission.
MOF aims to achieve the following outcomes:
- Sound Public Finances
- Growth with Opportunity for All
- High Performance Government
Sound Public Finances
MOF ensures that the Government’s fiscal position is sustainable over the medium and long term. MOF also ensures that Singapore’s reserves are optimally managed to balance the present and future financial needs of Singapore.
Top-ups to Funds to Support Longer-Term Investments
The Government will set up two new funds to finance the GST Voucher for the next five years, and to improve bus service standards and connectivity over the next ten years. We will also top up the Special Employment Credit (SEC) Fund to encourage companies to employ older Singaporean workers. We will continue to augment existing funds to support our commitments in healthcare, social assistance and education by topping up the Medical Endowment Fund, Community Care Endowment Fund and Edusave Endowment Fund. Please see below for the top-ups to these funds.
- GST Voucher Fund ($3.0 billion)
- Bus Services Enhancement Fund ($1.1 billion)
- Special Employment Credit Fund ($2.4 billion)
- Medical Endowment Fund ($600 million)
- Community Care Endowment Fund ($200 million)
- Edusave Endowment Fund ($200 million)
Growth with Opportunity for All
MOF aims to promote economic growth through the use of fiscal levers, create a conducive business environment and expand our international economic space. MOF also creates opportunities for a better life for all, and build a strong community.
For FY2012, MOF’s measures to achieve these objectives focus on two key thrusts: (i) Restructuring to Sustain Growth, and (ii) A Fair and Inclusive Society.
Restructuring to Sustain Growth
The Government aims to achieve productivity growth of 2% to 3% in this decade. MOF's fiscal measures are part of the Government’s efforts to upgrade and restructure our economy, so that we can grow by becoming more productive, thereby raising real incomes and standards of living for Singaporeans.
Enhanced Special Employment Credit (SEC)
To encourage employers to hire older Singaporean workers, employers will receive a Special Employment Credit (SEC) for their Singaporean workers who are above 50 years old and earning up to $3,000 per month. The SEC will be 8% of wages. A lower SEC will also be provided for workers with a monthly wage of between $3,001 and $4,000.
SME Cash Grant
To help companies, especially SMEs, offset higher business costs, companies will receive a one-off cash grant, pegged at 5% of their revenues in Year of Assessment (YA) 2012, capped at a payout of $5,000. To qualify, the companies must have made CPF contributions to at least one employee who is not a shareholder of the company.
Enhancement to Productivity and Innovation Credit (PIC)
To encourage smaller companies to invest in innovation and productivity, MOF will enhance the Productivity and Innovation Credit (PIC) scheme in the following ways:
- Increase in cash payout from 30% to 60%, for up to $100,000 of firms’ PIC expenditures per year. This will apply for YA2013 to YA2015.
- Companies can claim and obtain cash payouts on a quarterly basis instead of at the end of the financial year. This will apply from 1 July 2012.
- Claims for in-house training costs of up to $10,000 a year will not require external certification. This will apply from YA2012.
Renovation and Refurbishment Deduction Scheme
To help businesses renew and refresh their premises, the amount of expenditure that may be claimed under the Renovation and Refurbishment Deduction Scheme will be raised from $150,000 to $300,000 from YA2013 for each threeyear period.
Mergers and Acquisitions (M&A) Allowance Scheme
To provide further support to SMEs contemplating business consolidation, a 200% tax allowance (to be written down in one year) will be given on the transaction costs incurred in M&A, subject to an expenditure cap of $100,000. This will apply for M&A completed between 17 February 2012 and 31 March 2015.
To plug gaps in financing for larger, long-tenure cross-border projects, a project finance company (PFC) will be established by a consortium of financial institutions led by Temasek Holdings. The Government will guarantee the debt instruments issued by the PFC.
Double Tax Deduction for Internationalisation
To help companies meet the direct costs of overseas marketing and business development, double tax deduction may be given automatically, instead of on an approval basis, on qualifying expenses incurred on key overseas expansion activities. This will apply for up to $100,000 of expenses incurred for each YA, from 1 April 2012.
Other Tax Measures
- Extend GST Tourist Refund Scheme to international cruise passengers departing from the Singapore Cruise Centre and the upcoming International Cruise Terminal. The scheme will be implemented in January 2013.
- Give higher relief to goods brought in by qualifying travellers and residents from abroad, from 1 April 2012.
- Exempt the supply of investment-grade gold and other precious metals from GST from 1 October 2012.
- Provide clear guidelines specifying when a company will not be taxed on their gains from disposal of equity investments.
- Raise excise duties on (a) beedies, “ang hoon” and smokeless tobacco by 20%; and (b) unmanufactured tobacco by 10%, with effect from 17 February 2012.
- Replace the current Green Vehicle Rebate (GVR) scheme with a new Carbon Emissions-based Vehicle Scheme (CEVS) in January 2013.
- Lower the Special Tax for Euro V-compliant diesel cars from $1.25 per cc to $0.40 per cc, from 1 January 2013.
- Remove the Additional Transfer Fee (ATF) which was levied on used-vehicle transactions, with effect from 18 February 2012.
A Fair and Inclusive Society
We also have to create opportunities for lower- and middle-income Singaporeans, and provide stronger help for families who fall on difficult times to pick themselves up.
Higher Earned Income Tax Relief for Older Workers
To help older taxpayers retain more of their income from work, the earned income tax relief will be doubled for workers aged 55 and above. This will be effective from YA2013 onwards.
GST Absorption for Intermediate and Long-Term Care (ILTC) Sector
To further improve their affordability, GST for all subsidised patients using ILTC services will be permanently absorbed. This will include Community Hospitals, nursing homes and home care.
One-off Medisave Top-up
To offset the increase in MediShield premiums in 2012, all Singaporeans insured under MediShield will receive a one-off Medisave top-up. Please see table below for the top-up for each age group.
Extension of Special Employment Credit (SEC)
To support employment of Persons With Disabilities (PWDs) who have graduated from VWO-run Special Education (SPED) schools, the SEC will be extended to employers who hire these graduates. The SEC for PWDs will be set at 16% of the employee’s monthly income, up to $240 per month.
Doubling of Handicapped Earned Income Tax Relief
To help disabled workers of all ages earn more income, the Handicapped Earned Income Tax Relief will be doubled with effect from YA2013.
To help lower-income Singaporeans, the Government has introduced a permanent system of offsets in the form of a GST Voucher. There will be three components to the GST voucher: Cash, Medisave and U-Save:
- GST Voucher—Cash: The amount that an eligible Singaporean will receive is based on his income and the value of his home, as shown below:
- GST Voucher—Medisave: This comprises an annual top-up to the Medisave Accounts of older Singaporeans aged 65 and above and living in properties which have an Annual Value that does not exceed $20,000. About 85% of all elderly Singaporeans will benefit.
- GST Voucher—U-Save: These will be given to all HDB households to help directly offset their monthly utilities bills.
High Performance Government
MOF ensures that resources are utilised efficiently and effectively to achieve the desired Whole-of-Government (WOG) outcomes. MOF will undertake the following measures to achieve this objective:
Accountability for Performance
As part of MOF’s ongoing efforts to improve the accountability of Government, MOF will be publishing the next edition of Singapore Public Sector Outcomes Review (SPOR) at the end of 2012. SPOR reports on the performance of the public sector and the collective efforts of Ministries and agencies to address strategic challenges facing Singapore. The SPOR was first published in December 2010.
Efficient and Effective Use of Resources
The Centre for Public Project Management (CP2M) was set up in January 2011 to provide project management expertise to Government Agencies. CP2M ensures that large public sector building and construction projects are effectively managed with regard to cost, timeliness and quality. For large development projects, CP2M also convenes advisory panels and value management workshops to help agencies enhance the value proposition of these projects.
Bringing Public Service Delivery to the Next Level
MOF is developing “OneInbox”, a personalised online platform where citizens can conveniently retrieve electronic correspondences such as notifications of permit and licenses renewals from the Government, in place of hardcopy letters. We plan to launch “OneInbox” later this year.
For businesses, to simplify transactions with the Government, MOF is studying the feasibility of introducing a new “Corporate Pass”, a common user ID and password that businesses can use in all their transactions with the Government. If feasible, we target to launch Corporate Pass in 2014.
Building a Collaborative Government
Data.gov.sg was launched in 2011 to catalyse the co-creation of applications and services by individuals and companies, by providing quick and easy access to publicly-available government data. In 2012, MOF will further encourage such co-creation through the “Ideas4apps Challenge”, where individuals can submit creative ideas on what applications can be developed using government data.
To find our more about MOF and our initiatives, please visit our website.