OTHER TAX CHANGES

Entertainments Duty

At present, the duty on entertainments, with the exception of racing of horses and vehicles, is 10% of the payment for admission. In keeping with our commitment to create a more vibrant cultural and entertainment scene in Singapore, the duty will be reduced to 5%. The duty on admission to horse and vehicle races will remain at 35%. Details of the changes are in Appendix I (Cols. 265 - 266). The change in duty will take effect from 1st April, 1991. The revenue loss is estimated at $7 million a year. Appendix I - ENTERTAINMENTS DUTIES (Cols. 265 - 266)

Tourism Cess

Our economy is expected to perform reasonably well on an overall basis this year. However, some sectors, such as hotels, restaurants and tourist-related retailshops, have been adversely affected by the secondary effects of the war in the Gulf. To assist these sectors, the tourism cess rate will be reduced by 1 percentage point from 4% to 3%. The reduction will take effect from 1st April, 1991 and will be for a period of one year. It will cost the Government about $22 million in cess revenue. This concession should help hotels and restaurants to tide over their current difficulties.

Duties on Cigarettes and Tobacco

Duties on cigarettes and tobacco were last revised in March 1989 to discourage smoking. Although a decline in smoking among older adults has resulted in an overall decline in consumption, there has been a marginal increase in smoking among our youths.

In support of the national effort to turn Singapore eventually into a nation of non-smokers and in particular to discourage smoking among our younger population, the import duty on cigarettes will be raised by $15 per kilogram to $100 per kilogram. The import duty on tobacco and excise duty on cigarettes will also be increased by $8 per kilogram and $10 per kilogram respectively to $50 per kilogram. With your permission, Sir, I would like to table Appendix II (Cols. 267 - 268) showing details of the increases. These increases will take effect from today. Appendix II - DUTIES ON CIGARETTES AND TOBACCO (Cols. 267 - 268)

Water Conservation Tax

With economic progress and a rising standard of living, Singaporeans have been steadily consuming more water each year. Both domestic and non-domestic water consumption have gone up by 4.4% annually over the past 10 years, despite periodic Water Conservation Campaigns and tariff revisions.

Early last year, following an unusually dry spell, water stocks in our reservoirs fell to very low levels, highlighting our acute dependence on adequate water supplies and the need for measures to curb the demand for water. To slow down growth in water consumption, a Water Conservation Tax will be introduced with effect from 1st April, 1991. Residential premises which consume more than 20 cubic metres of water per month will pay a 5% tax on the excess amount. The Water Conservation Tax will be in addition to the existing 5% tax on PUB bills of domestic consumers that exceed $40 per month. The majority of households, about 60%, will not be affected by the tax as they consume less than 20 cubic metres of water monthly. The Water Conservation Tax for the non-domestic and shipping sectors will be set at 10% as these sectors do not now pay the 5% PUB tax.

Government is actively exploring and developing new sources of water to meet Singapore's future needs. The Linggui dam project in Johor is currently in progress and future requirements may have to come from as far afield as Pahang and the Riau islands. Building reservoirs, dams and pipelines involves heavy capital expenditure. These must eventually be recovered through higher water tariffs. Regular revisions of water rates can, therefore, be expected within the next few years.