OTHER TAX CHANGES

Reduction in Property Tax Rate

The property tax rate for industrial, commercial and let out residential properties was reduced from 23 to 16% in 1990. Nonetheless, our property tax rate is still higher than those in some of our neighbouring countries, such as Thailand and Malaysia.

To help reduce business costs and enhance Singapore's competitiveness in attracting foreign investments, the property tax rate will be lowered in stages to 12% over the next 4 to 5 years. As a first step, I have decided to reduce the property tax rate of 16% by 1% to 15% of annual value across-the-board. The reduction will take effect from 1st July 1994. The revenue loss involved for Government is estimated at $84 million. The concessionary tax rate for owner-occupied residential property will remain at 4%. Duties on Cigarettes and Tobacco

As duties on cigarettes and tobacco were last increased in 1993, there will be no increase this year. However, to meet GATT requirements, imported cigarettes will be subject to both import and excise duties with effect from 1st July 1994. To maintain the existing tax incidence, import duty on cigarettes will be reduced to $55 per kilogram. Excise duty on cigarettes will remain at $60 per kilogram. Existing import duty on tobacco of $60 per kilogram will be removed and replaced by excise duty of the same value. Details of the duty changes for the various types of cigarettes and tobacco are in Appendix 2 (Cols. 443 - 445). Appendix 2 (Cols. 443 - 445)

Duties on liquor

As duties on liquor were last revised in 1992, I do not propose to raise them again this year.

However, to meet GATT requirements, import duties on hard liquor, sake, wine, vermouth, cider, perry, arrack and pineapple spirit will be removed and replaced by excise duties. Imported beer, stout and samsoo will be subject to two duties: import duties and excise duties. The existing excise duties on beer, stout and samsoo are $2.80 per litre, $3.10 per litre and $11.00 per proof litre respectively. To maintain the same tax incidence as before, the import duties on beer, stout and samsoo will be reduced to $0.80 per litre, $1.70 per litre and $4.50 per proof litre respectively. These duty changes will take effect from 1st July 1994. Details are set forth in Appendix 3 (Cols. 447 - 451). Appendix 3 (Cols. 447 - 451)

Duties on Motor Vehicles

As announced in my 1993 Budget Statement, import duties on motor vehicles will be reduced to nullify the effects of GST. Hence with effect from 1st April 1994, import duties on cars, taxis and motor cycles will be 41%, 17% and 12% respectively. To meet GATT requirements, import duties on motor vehicles will be revised and replaced by excise duties with effect from 1st July 1994. Duties on Petrol

Excise duties on petrol will also be reduced to nullify the effects of GST. Duties on leaded premium, intermediate and regular grades petrol will be reduced to the higher of 46% of pump price plus 7.8 cents or 71 cents, 68 cents, and 63 cents per litre respectively. Duties on unleaded premium, intermediate and regular grades petrol will be reduced to the higher of 46% of pump price or 57 cents, 54 cents and 49 cents per litre respectively. Duties on kerosene, lubricating oil, liquified petroleum gas and aviation spirit will be suspended. The revised duty rates for petrol will come into effect on 1st April 1994. Details of the duty changes are in Appendix 4 (Cols. 453 - 456). With these changes, the total tax collected per litre of petrol, inclusive of GST will remain unchanged from 1st April 1994. Appendix 4 (Cols. 453 - 456)