Finance Minister Heng Swee Keat delivered the Singapore Budget 2017 on Mon 20 Feb. Since I have spent a few years working in the tax division of accounting firms in Australia and Singapore, the Budget speech is something I have gotten used to following every year. It has become a habit to review the corporate, personal and other tax measures that are announced then. But let’s focus on how this Singapore Budget 2017 is going to impact my wife and I. I’m sure everyone else is doing the same and the impact can vary according to your personal circumstances.
Personal income tax rebate
This is one of the first things I check for every Budget since it usually has the most significant impact on me as a salaried employee. Which is why I was pleased to see that there will be a personal income tax rebate of 20% of tax payable for Singapore tax residents for YA2017, capped at S$500. For your information, YA or Year of Assessment refers to the year in which income tax is calculated and charged. The assessment is for the income earned in the preceding year, starting on 1 Jan and ending on 31 Dec. For YA 2017, the assessment is for income earned from 1 Jan 2016 to 31 Dec 2016.
Since we are both expected to have chargeable income of above S$68,000 separately for YA2017, we should be getting the maximum personal income tax rebate of S$500 each. This directly reduces the amount of personal income tax both of us have to pay by S$1,000. Furthermore, we do not need to apply for this rebate since IRAS will compute and grant the rebate automatically to us. I hope you understood what I was writing. It never ceases to amaze me how little Singaporeans understand of their income tax matters. Must have something to do with IRAS simplifying and automating the entire income tax filing process by so much that Singaporeans don’t bother to manually check what’s actually inside their income tax returns. Don’t be so reliant on IRAS and start being more responsible with your own tax matters.
No personal income tax rate increases
There were no adjustments to the current personal income tax rates as seen from this table on the IRAS website:
It surprises me every single year that the Government can keep the personal income tax rates this low. Don’t get me wrong. Not saying we prefer or want to pay more income taxes. Just an interesting observation when I compare it to the 4 years we spent working in Australia where we paid easily more than twice the amount of income taxes we are paying now each year.
Water price increases
Win some, lose some. From 1 July 2017, water prices will be increasing by 30% in two phases by 1 July 2018. This is to encourage water conservation and sustain water supply. My monthly water bill is about S$7 according to my utility bill summary. With this increase in water prices, it might go up to S$9. We buy bottled water for consumption when we are out on the weekends. It’s currently S$0.80 for 2 bottles when on offer in NTUC or Cold Storage. Now it might go up to S$1 for 2 bottles.
I saw a big fuss being kicked up about this on social media, especially from households with big families. Honestly, it’s difficult for us to get into it when we might only end up spending S$3 more each month with this increase in water prices. I’m more concerned with my electricity bill, especially from my air-con usage every night. Anyway, I’m always surprised with utility price increases announcements from the Government during the Budget speech. They have a small impact on the household budget but get the biggest negative reactions from people.
I had to write this because I just realised that’s the extent of the monetary impact of the Budget on us. We live in a private condominium so we don’t get access to the GST Voucher – Utilities-Save (U-Save) rebate and Service & Conservancy Charges (S&CC) rebate for eligible HDB households. Same applies to the one-off GST Voucher – Cash Special Payment for lower-income households. The increase in CPF Housing Grant for first-time applicant couples buying a HDB resale flat is also not relevant to us.
You learn this lesson every time at the Budget speech. We are usually not the target group of people that the Government is trying to help when it comes to our jobs, financial matters etc. We have to take care of ourselves because we can’t rely on anyone else to do that for us. But be grateful for every benefit you receive because it doesn’t come by often.