TAX payers in Singapore will get a tax rebate of 20 per cent for the year of assessment 2008, to be capped at $2,000.

Announcing this in his Budget speech on Friday, Finance Minister Tharman Shanmugaratnam said as the Government had a strong surplus last year, it will give something back to taxpayers this year.

The $2,000 cap is to help those those below the top income brackets.

The income tax rebates will cost the Government $380 million. But income tax remains unchanged at the top personal rate of 18 per cent.

'For most taxpayers, Singapore's personal income tax regime is already one of the most competitive in the world, because our marginal tax rate schedule is highly progressive,' said Mr Shanmugaratnam.

'We will not be making any further move on personal income tax rates this year. But we will continue to watch this and ensure that we are always able to attract and keep talent in Singapore, including those at the top end.'

'After we amend the Constitution to revise the framework for drawing investment income from our reserves, we will reassess our options on corporate and personal income tax and lower rates further should it become necessary.'

Liquor will be taxed based on alcoholic content
The Minister also announced that all alcoholic beverages will be taxed on the basis of their alcoholic content, with effect from Friday. This will see a slight reduction in duty rates on most liquors.

Other tax reducation will include a 15 per cent cut in Additional Registration Fee of vehicles, that will accompany the expansion of the Electronic Road Pricing system.

Changes will also be made to the tax levied on private diesel cars.

The current special tax on private diesel cars is too punitive, said the minister, 'which explains why we only have one such car on the road today'.

The changes will narrow the difference in the cost of fuel consumption that a motorist faces, between a Euro-IV car and a petrol car.

Is this article useful to you?