Singapore’s Deputy Prime Minister, Coordinating Minister for Economic Policies, and Minister for Finance Heng Swee Keat presented the Budget 2021: Emerging Stronger Together plan, outlining the government’s strategy for addressing current issues and its vision for a stronger Singapore. The goal is a nation that is economically thriving, socially unified, and environmentally sustainable for all.

Source: Singapore Ministry of Finance.
Cover, Budget Booklet.

To fund Singapore’s regular expenses, the government previously announced in Budget 2018 that the goods and services tax (GST) rate would increase between 2021 and 2025. This change is expected to happen sooner rather than later, between 2022 and 2025.

“We need to prepare Singaporean companies for upcoming changes in global tax policies. As governments adjust their revenue strategies in response to COVID-19, there’s an expectation of increased tax disputes. It’s crucial to ensure Singapore secures its rightful portion of global tax revenue," stated Chris Woo, Tax Leader at PwC Singapore.

An S$11 billion COVID-19 Resilience Package (CRP) will address Singapore’s immediate needs. This package aims to protect the health of Singaporeans, provide ongoing support to workers and businesses, and offer more focused aid to the sectors most impacted by the pandemic. Of this package, S$4.8 billion is allocated to public health and measures for a safe reopening. The remaining funds will continue to help struggling workers and businesses.

The government will foster a thriving business sector and a supportive environment for innovation. This includes strengthening Singapore’s position as a global hub in Asia by focusing on the aviation sector’s recovery and investing in platforms that allow local businesses to innovate and collaborate internationally, especially with ASEAN countries.

To promote community support, the 250% tax deduction for donations to Institutions of a Public Character (IPCs) will be extended until the end of 2023. The Business and IPC Partnership Scheme, Tote Board’s Enhanced Fund-Raising Programme, and ComChest’s SHARE as One matching grant will also continue. A new S$20 million Change for Charity Grant will be implemented to encourage businesses to make it easier for their customers to donate during everyday transactions.

Budget 2021 included several measures as part of the Singapore Green Plan 2030, including a shift towards car-lite lifestyles. In addition to investments in public transportation, the government will introduce various initiatives to encourage the adoption of electric vehicles (EVs) and discourage the use of traditional combustion engine vehicles. These initiatives include setting up 60,000 charging stations in public parking areas and private properties by 2030, and allocating S$30 million over the next five years for EV-related projects.

To fund these sustainability initiatives, the government will set an example by issuing green bonds for specific public infrastructure projects. Initially, up to S$19 billion worth of public sector green projects have been identified.

The public sector will also pledge to achieve more ambitious sustainability targets through the new GreenGov.SG program. For instance, the Ministry of National Development, Home Team Academy, and Temasek Polytechnic are transitioning to refrigerant chillers with lower global warming potential ahead of the mandatory adoption deadline at the end of 2022. This change will reduce carbon dioxide emissions by 24 kilotonnes, which is equal to the annual emissions from approximately 7,400 cars.

Hari V. Krishnan, CEO and MD of PropertyGuru Group, expressed support for Singapore’s commitment to sustainable urban living. He believes the latest measures to encourage residents to reduce car use and transition to cleaner vehicles are timely. Krishnan also welcomes the focus on urban solutions and sustainability in Research, Innovation and Enterprise 2025 (RIE 2025) to help Singapore create a more sustainable and livable environment.

Chris Woo anticipates further details on how Singapore plans to become a global leader in environmental, social, and governance (ESG) practices, based on its Green Plan. This includes developing new skills and creating jobs centered around sustainability, promoting businesses focused on green finance, and establishing Singapore as a global center for green finance and innovation capabilities in sustainability.