Just like in any other nation in the world, a traditional Singapore budget is read on an annual basis, to facilitate government and state operations.
However, this year the budget having been read, faced dramatic twists, as a result of The current pandemic Covid-19, a supplementary budget was initiated to bring socio -Economic balance to in a president structure.
The annual budget for the year 2020 was set to articulate s$ 83.6 billion with s$1.6 billion set aside for the welfare of Singaporean citizens. This was inflated by an extra s$48 billion that was pulled out of the reserve in the treasury.
Where do the funds come from?
Funds allocated by a budget of a financial year are basically collected from taxes, licensing, court fines, and government businesses. 71.1% of the revenue is derived from taxes.
The major source of revenue is taxation as compared to receipts and other sources that amount to 29.9%.
There are multiple types of tax frames in Singapore, as listed below:
- Personal taxes
- Corporate taxes.
- Value-added tax.
Personal tax rate starts from 0% and a maximum cap at 22% depending on the amount one earns, this is for inhabitants of Singapore.
For nonresidents, the rates are slightly different, but friendly. The tax is normally caped at 15 % from the lower side while a normal 22 % is imposed from the top side.
For corporate taxation, Singapore Relies on the single-tier system, whereby the government does not tax an entire institution, but tax individual shareholders. The dividends that are paid on profit are not aligned to the shareholders, upon payment of profits. In this case, dividends are tax-free.
Value-added tax (VAT)
Value-added tax is normally imposed against domestic products and is normally carped at a universal 7% for all products, but a tax-free policy can apply to some assorted products.
This is supposed to be collected at various sales points such as shops and other product and service dispensing centers.
Have you ever wondered what it takes for the budget Singapore to be implemented?
For a budget to be implemented, it takes the hands of major stakeholders in the Governments agencies to table pass and implement a budget with the Minister of Finance, currently Mr Heng Swee as the overall overseer and the main contact person.
Precisely below are the steps a budget must go through for it be put to use;
- The feedback process.
This process is initiated as the first step, whereby there are discussions, compliments, but and deductions through major government stakeholders and in the ministry of finance(MOF).
This is in consideration of state priorities, trade-offs and the feasibility of the budget.
At this consultative end, the public is also involved, whereby citizens drop their suggestions through interactive meetings by the MOF.
Singapore has an integrated way of collecting Views from Citizens across the island, with them being,
Interactive and platforms, social networks and listening points for dialogue sessions.
- Budget Presentation to the parliament.
After the first step, the minister of finance presents the budget for approval whereby he proceeds to present it in parliament for alignment and queries by members of parliament.
At this point, the minister of finance responds to questions arising to the current budget through an open question and answer forum in parliament. This is supposed to be convened a week after it has been read in parliament.
- Budget approval cycle.
This is the most critical point of budgeting whereby the parliamentary committee of supply analyses allocations to specific ministries, and may propose a cut or uplift for a ministry depending on the needs.
Subsequently, the budget is sent to the president for consent through signing.
Henceforth, the budget is presented to the general public by the minister for finance.
Major allocations by the budget of Singapore.
The funds are allocated according to ministries depending on the expenditure and various state agencies.
How is the expenditure determined?
The expenditure is based on pending bills, current projects, and salaries for employees.
Some of these funds are recurrent until an adjustment is required.
The allotment is governed by the constitution to ensure no misappropriation of any funds, especially in a seriously presidented system of governance of the caliber of Singapore.
This one is evident in the year 2020 whereby an adjustment was made on the budget from the reserve, as dictated by the constitution in the case of an emergency. This is known as the resilience Singa Singapore.