TAX ON INDIVIDUALS

Personal Income Tax

Our personal income tax rates are lower than those in many other countries. They ensure that all carry their fair share of the tax burden. They also adequately reward effort and enterprise. I do not therefore propose to make any changes to the tax schedule.

Although our economy slowed down in 1991, we achieved a satisfactory growth rate of 6.7%. This rate is above our long term target of 4 - 6%. We reached it despite the difficult economic conditions throughout the world last year. I have no doubt that the hard work and initiative on the part of our people contributed significantly to our success. I have therefore decided to encourage continued individual efforts by giving an across-the-board and one-off rebate of 5% for personal income tax for Year of Assessment 1992. The estimated revenue loss is $70 million.

Rebate of Service and Conservancy Charges

For citizen householders staying in rented and owner-occupied one, two and three-room HDB flats who pay little or no income tax, the Government has decided to pay to Town Councils, on their behalf, the Service and Conservancy charges payable in the month of December 1992. This is a one-off payment applicable to Singapore citizens only. It is the equivalent of the 5% income tax rebate.

Tax Relief for Reservists

Reservists play a crucial role in preserving the prosperity we enjoy. Their contributions therefore deserve special recognition. Last year, the Ministry of Defence (MINDEF) set up the Committee for the Recognition of the Contribution of Reservists to Total Defence (RECORD) to make recommendations.

Among many recommendations made and implemented by MINDEF, RECORD also proposed that reservists be granted symbolic financial incentives. MINDEF has therefore recommended that this recognition be given at the national level in the form of personal tax reliefs. MINDEF further recommended that it be given this year, as we commemorate 25 years of national service.

Government has accepted MINDEF's recommendations and I am pleased to announce that the following tax reliefs would be granted:

a) $1,000 for all active reservists, that is, those who are called up annually for in-camp training and other activities to maintain their operational proficiency;

b) $500 for all who have done national service but are not in active reserve service.

The tax reliefs will apply also to those who have done national service in the other services, like the Police Force and the Singapore Joint Civil Defence Force. These reliefs will take effect from Year of Assessment 1993. The estimated revenue loss is $20 million.