Page 5 - RSM Budget 2023 Highlights

a subset of deductions under the Double Deduction for Internationalisation Scheme for the incurrence of qualifying
e-commerce campaign start-up costs.

The Minister also announced Singapore’s intention to implement in 2025 Pillar 2, Global Anti-Base Erosion Rules (the
Income Inclusion Rule and Undertaxed Profits Rule) of the Base Erosion and Profit Shifting (“BEPS 2.0”) initiative
and Domestic Top-up Tax. Once implemented, it essentially will top up the effective tax rate of impacted MNEs
operating in Singapore to 15%. Following this decision, the Government will take steps to review and update our
broader suite of industry development schemes to ensure that Singapore remains competitive in attracting and
retaining investments from overseas.

To address our fast ageing population, the Government is also focusing on the retirement adequacy of our middle-
income group and helping them save more for their retirement. In this area, the CPF monthly salary ceiling for
Ordinary Wages will be increased in stages from $6,000 to $8,000. At the same time, the senior worker CPF
contribution rates are also set to increase for the third time in January 2024. Once the planned increases are fully
implemented, those aged above 55 to 60 will have the same CPF contribution rates as younger workers.

The Government would need to look at ways to raise revenue in order to maintain its fiscal balance each year. Two
progressive tax changes were announced which signal the Government’s commitment to keep its overall system
of taxes and benefits fair and progressive. Firstly, the introduction of higher buyer’s stamp duty rates for higher-
value residential properties in excess of $1.5 million and non-residential properties in excess of $1 million. Secondly,
buyers of more expensive luxury cars will be required to pay higher Additional Registration Fee at the point of
registration and the Preferential Additional Registration Fee rebate will be reduced upon the vehicles’ deregistration.

In summary, the focus of this year’s Budget is to remind businesses to press on with economic transformation and
restructuring. Training its workforce is key as that would translate into good employment outcomes. These
measures will allow Singapore to continue to grow and develop in a way that is both sustainable and responsible.

Partner
14 February 2023

BUDGET 2023 HIGHLIGHTS | 3