SINGAPORE (Feb 19): All Singaporeans aged 21 and above will receive a one-off “SG Bonus” of $100, $200, or $300, depending on their annual income, Finance Minister Heng Swee Keat announced at his 2018 Budget statement on Monday.

The budget statement comes after Singapore's trade-reliant economy in 2017 recorded full-year growth of 3.6% – the highest in three years.

According to Heng, the “hongbao” is a way to share some of the year’s budget surplus with the nation.

The SG Bonus will cost the government some $700 million.

This comes after Singapore's revised FY2017 budget surplus soared to $9.61 billion – five times higher than earlier estimates of $1.91 billion.

The increase was on the back of higher operating revenue due to exceptional contributions from the Monetary Authority of Singapore (MAS), as well as higher-than-expected stamp duty and corporate income tax collections.

Led by the MAS, statutory board contributions surged to $4.9 billion in FY2017, compared to the $0.3 billion that was expected.

A revitalised property market also saw stamp duty collections rise to $4.7 billion on an increased number of property transactions, up from an expected $2.7 billion.

FY2017 revenue was further lifted corporate income tax contributions of $14.4 billion, some $0.8 billion higher than expected.

While the FY2017 budget surplus is the highest-ever figure in real dollar terms, Heng cautioned that such contributions from the statutory boards and higher stamp duty collections are not expected every year.

"We cannot base our long-term fiscal planning on the basis of exceptional factors being positive, year after year," he says.

As a result, the bulk of the surplus is being set aside for future spending. These include $5 billion to be set aside for a Rail Infrastructure Fund and $2 billion to be channelled towards the subsidy of premiums and other forms of healthcare support.

For FY2018, an overall budget deficit is expected at $0.6 billion, or 0.1% of GDP. Ministries’ total expenditures are expected to rise by $6.1 billion, or 8.3%, to hit $80.0 billion in FY2018.

Some highlights of Budget 2018

Taxes
• Singapore's good and services and taxes (GST) will be increased by 2 percentage points, from 7% to 9% sometime from 2021 to 2025. Heng said that it is likely to be implemented earlier rather than later in that period.
• Singapore introduced a new GST on business-to-business and business-to-consumers imported services which will not affect e-commerce for goods. The GST does not apply if an overseas supplier does not have an establishment here. More detail will be released by the end of this month.
• Singapore will raise its corporate income tax rebate to 40% of tax payable, capped at $15,000. It will extend the corporate tax rebate to 2019, at a rate of 20% of tax payable, capped at $10,000.
• Singapore will increase excise duty on all tobacco products by 10%, effective Monday.
   
Property stamp duty
• Singapore will raise the top marginal buyer's stamp duty for residential properties from 3% to 4%. The change will apply to all residential properties acquired from tomorrow (Tuesday). 

Environment
• Carbon tax, which will be implemented in 2019, will stand at $5 per tonne of greenhouse gas emissions from 2019 to 2023. It will be reviewed by 2023, and is planned to be increased to $10-$15 per tonne by 2030. Singapore expects to collect $1 billion from the carbon tax in the first five years.

Foreign worker levy
• Singapore will defer earlier announced increases in foreign worker levy rates for another year for marine shipyard and process sectors.
   
Infrastructure
• Singapore increased its infrastructure spending from $8.5 billion in 2011 to an estimated $20.0 billion in 2018.
• Similar to the Changi Airport Development Fund in 2015, Singapore will set up a new Rail Infrastructure Fund to save up for major rail lines, which starts with an injection of $5 billion in fiscal 2018.