Singapore Budget 2023: Moving Forward in a New Era

The Budget Statement for Budget 2023 was delivered on 14 February 2023. Following the lowering of the Disease Outbreak Response System Condition (DORSCON) level from yellow to green on 13 February 2023, Budget 2023 sets out a comprehensive range of measures to deal with the transition to a post-COVID-19 Singapore. This includes the strengthening of Singapore’s social compact, and addressing concerns about inflation and the higher cost of living in Singapore. At a glance, some key measures include:

• Extra financial support to help Singaporeans cope with inflation and cushion the impact of the higher goods and services tax rate;
• S$3 billion enhancement to the Assurance Package, translating to a S$300 to S$650 increase in total cash payouts for each eligible Singaporean;
• S$30,000 increase in the Central Provident Fund (“CPF“) housing grant for eligible families purchasing four-room or smaller resale units and S$10,000 for those purchasing five-room or larger flats;
• Raising the CPF monthly salary ceiling from S$6,000 to S$8,000 in 2026;
• The doubling of voluntary Government-paid paternity leave to four weeks for fathers of Singaporean children born on or after 1 January 2024; and
• An increase in the Government’s co-funding support under the Progressive Wage Credit Scheme.

The tax measures and changes announced are categorised as follows:

• Tax Implications on Corporations
• Tax Implications on Individuals
• Encouraging a Culture of Giving
• Increased Tax for Purchases of Higher-value Properties and Vehicles

In this Update, we discuss selected tax measures, changes, enhancements and extensions, and refinements.