Budget 2016 – the one event that many are fixing their eyes on. Set to be announced this coming Thursday, Budget 2016 bears a few significance – it is the first Budget for the new Minister of Finance, Mr Heng Swee Keat, who took over the portfolio from Mr Tharman Shanmugaratnam.
More importantly, it follows a critical time when the country is going through an economic slowdown – and the economic is looking really bad now with analysts slashing growth projections. Headlines such as “Still looking for work 6 months after losing job” and companies laying off employees can be seen from Singapore media.
So the Budget 2016 is particularly important because the Government will be announcing policies and allocation of resources to areas that will impact the lives of many.
Here’s what we are looking out for from the announcement this Thursday:
One of the biggest aspiration from Singapore is its push for a Smart Nation, and we are pretty sure that Singapore will be allocating a significant bulk of Budget 2016 to the various Smart Nation initiatives. Prime Minister Lee Hsien Loong is also not shy from actively promoting Smart Nation. Earlier this month too, Singapore’s Infocomm Development Authority (IDA) also launched Singapore’s first Smart Nation Fellowship Programme, which is targeted primarily at Singaporeans working overseas. The programme provides opportunities for successful applications to work alongside software engineers from a crack team at IDA, dubbed Government Digital Services (GDS).
“Building a smart nation requires all hands on deck,” said IDA managing director Jacqueline Poh.
Its launch comes after Prime Minister Lee Hsien Loong’s visit last month to San Francisco, where he encouraged Singaporeans working there to maintain their links and return one day.
“Therefore our vision is for Singapore to be a Smart Nation – A nation where people live meaningful and fulfilled lives, enabled seamlessly by technology, offering exciting opportunities for all. We should see it in our daily living where networks of sensors and smart devices enable us to live sustainably and comfortably. We should see it in our communities where technology will enable more people to connect to one another more easily and intensely. We should see it in our future where we can create possibilities for ourselves beyond what we imagined possible.” – Prime Minister Lee Hsien Loong, Smart Nation’s launch in November 2014.
We expect some announcements to be made in the transportation sector too, and as we wrote recently, private drivers for Uber and GrabCar may soon be required to have a vocational license before they can legally pick up passengers around the island.
There are also various noticeable improvements in the national transportation system, notably, Singapore having its third bus operator, Tower Transit, and the transition of the public bus system to a Bus Contracting Model, where the Government will gradually own all public buses.
We are also hoping for the Government to push for more electric car adoption, especially following the big news about how the first Tesla S in Singapore has been slapped with a S$15,000 fine.
3. Personal Tax
Another recent big news which hit the media just a week before Budget 2016 was the news of IRAS clamping down individuals with income sources from social media.
According to an online statement by IRAS, “Payments in exchange for services performed by social media influencers such as bloggers, YouTubers, etc. can take the form of money, goods or services. All monetary and non monetary payments / benefits-in-kind are taxable if they are given in return for services rendered or to be rendered by you.”
With the rise of social media influencers – we may see some announcements from the Government on more stringent enforcement of personal tax.
4. Online Shopping Tax
Another news which has been discussed recently is the possibility of the Government taxing GST on online purchases from overseas sites.
How it works in Singapore is that Goods and Services Tax (GST) need not be paid for imported items bought online by locally based consumers, except for dutiable products which includes alcohol, tobacco products, and vehicles — if the cost (including insurance and freight charges) totals up to S$400 or less. This is why many online shoppers spread out their purchases to avoid paying tax.
With online shopping showing no signs of slowing down, we may see some announcements from the Government.
5. Productivity & SME
This is perhaps the most important announcement we are all fixing our eyes on – how the Budget will address the challenges of companies in Singapore, especially since economic outlook is so bad now.
Finance Minister also acknowledge that the Budget will largely address SMEs’ immediate challenges, and provide more support via innovation, internationalisation, transforming or upgrading their business models and making their operations more efficient.
We expect grants, rebates or tax policy changes to be announced.
Anything we missed out?