Economy to grow 3.5-5.5% in 2004

Deputy Prime Minister and Minister for Finance Lee Hsien Loong reaffirmed the Government's commitment to maintain Singapore's competitiveness and create jobs when he presented the Budget for Financial Year 2004/05. He also spelt out the principles and key considerations behind Singapore's procreation policy.

The Government ran a $1.8 billion deficit in FY 2003 and expects a budget deficit of $1.35 billion in FY 2004, after taking into account the $826 million of tax savings for businesses and individuals in this Budget.

However, DPM Lee reaffirmed the Government's commitment to fiscal prudence and announced a target to balance the budget by FY 2005. In view of the tight fiscal position, he announced a permanent 2% cut in the budget allocations for all ministries, except the Ministry of Defence, for FY 2004.

Boost for businesses

The 2004 Budget includes a comprehensive package of measures to create a "best for business" environment that supports creativity and enterprise, and attracts talent and investments to Singapore.

A Competitive Tax Regime

The Government will lower the corporate tax rate to 20% from Year of Assessment (YA) 2005. It has deferred lowering personal income taxes, but remains committed to reducing the top personal tax rate to 20% as soon as budgetary conditions permit.

To boost private wealth management activities, all foreign-sourced income remitted by resident individuals will be exempt from tax. Singapore-sourced investment income derived by individuals from financial instruments will also be exempt from tax from YA 2005.

To continue to attract and root new activities in Singapore, the maximum duration for the pioneer incentive will be extended from 10 to 15 years, while the regional HQ incentive will be extended from 3 to 5 years.

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