Tag: budget

  • Upgrading To Bigger Motorbikes? Maybe Not With Latest Taxation System

    Upgrading To Bigger Motorbikes? Maybe Not With Latest Taxation System

    He was planning to replace his current five-year-old Ducati 848 with a new Ducati Panigale this year, but Mr Kevin Liew now has to consider cheaper options instead.

    The change of plans came after Finance Minister Heng Swee Keat announced a new tiered tax system for motorcycles while delivering the Budget on Monday (Feb 20) in Parliament.

    Under the new system, the 15-per-cent Additional Registration Fee (ARF) will stay for motorcycles with an open market value (OMV) of up to S$5,000. The subsequent S$5,000 of its OMV will incur an ARF of 50 per cent, and the remaining OMV above S$10,000 will come with an ARF of 100 per cent.

    The Ducati Panigale that Mr Liew was eyeing was estimated to cost around S$40,000, but with the changes, it would cost “around S$50,000 or S$60,000”, the 27-year-old marketing manager said.

    “Bikes are already overpriced in Singapore compared to other countries because of the COE (Certificate of Entitlement),” Mr Liew added. “With this new scheme, they are only going to get even more expensive.”

    Mr Heng said that a small but rising number of buyers are getting expensive motorcycles, with OMVs similar to those of small cars. To address this, the tiered ARF would be introduced for motorcycles registered with COEs obtained from the second February bidding exercise onwards.

    He added that, going by current registration trends, more than half of new motorcycle buyers would not have to pay more.

    Although the new tax scheme is meant to target luxury-bike owners, some owners of “working class” motorcycles said that they would be affected as well. And the bikers community is upset over the move, lamenting that it would cause a spike in motorcycle prices.

    Mr Justin Khaw, 25, who rides a Honda Trial Bike and was planning to switch to a Honda Africa Twin, said: “Nowadays, most bikes in the open class 2A category cost close to S$10,000 and above.”

    With the new ARF, instead of paying S$32,000 for the Honda Africa Twin, Mr Khaw, an undergraduate, will have to fork out around S$36,000 to S$40,000. He has since decided to look for something cheaper.

    Mr Khaw remarked that the move would do little to reduce vehicular traffic. “If Singapore’s goal is to curb congestion on the roads, then perhaps alternative transport such as motorcycles should be considered. So why are the taxes for motorcycles increasing? Shouldn’t it be decreasing instead?”

    Given that cars and motorcycles do not contribute to congestion equally, he said, he wondered why bikers are “taxed and subjected to the same vehicle control policies as cars”.

     

    Source: www.todayonline.com

     

  • Live Below Your Means In This World So You Can Prepare For Life In The Hereafter

    Live Below Your Means In This World So You Can Prepare For Life In The Hereafter

    Waited before I made this posting. Didn’t want to spoil anyone’s vacation.

    It was so wonderful to see so many of my FB friends going on vacation with their families. I saw so many countries visited. From all corners of the globe. Truly fantastic to spend quality time with family.

    Recently had dinner with an old friend from varsity. He’s a very successful businessman, running a multi-million dollar enterprise for more than two decades. And what a kind heart. He has helped so many of the poor and downtrodden all over the world. May Allah azzawajal Bless and Protect him. But I digress.

    He said that never before on the more than two decades of doing business has he seen the situation so bad. Not the 2008 financial crisis. The 2003 SARS one. Or any one of the financial downturns in the last two decades.

    MAS recently made the announcement that we should be circumspect with our spending, putting away savings for the coming financial headwinds. I honestly can’t remember the last time they did this.

    Anecdotallly u can see signs of a slowdown if u look carefully. Juz yesterday went to IKEA. Normally on a weekend they will be quite a queue at the checkout. This time around I hardly had to wait to be served.

    Bringing me to my main point.

    We should look upon the impending financial slowdown as an opportunity. So we should create a financial ‘war chest’ to be used when the time is right.

    For e.g. My car is 8 years old. Alhamdulillah it still purrs like a kitten. So in the event of a financial slowdown, the coe will fall. If and when it does I’ll be ready to take advantage.

    And the niyyah (intent) is to try to steer clear of interest costs (riba). Hopefully the coe will fall at the time I need to renew the coe. That way, I InshaAllah will pay cash for the coe and get another ten years of usage without incurring any riba. Incidentally 8 years ago I bought the car and paid cash in full. So InshaAllah I can have usage of it for the next 10 years without paying any installments and be virtually debt free.

    Another person may be looking to get a bigger flat coz of growing family etc.

    So financial savings now can mean one can strike when the iron is hot. Also if u r a hi income earner, u may want to think of getting a second property. The objective is to get a steady stream of passive income, such that you don’t have to be so dependent on the promotions n bonuses at work.

    This is important methinks. If one is too focused on promos n bonuses it would take up slot of time and energy. And you pay a price, because less time N energy would be spent serving the Deen of Allah azzawajal and investing for the Everafter. The opportunity cost is not worth paying.

    Also if u r too dependent on the monthly income, U will be unable to speak up at work when the situation calls for it.

    So we need to think strategically. Link our financial goals towards freeing ourselves to serve His Deen.

    In the meantime, Live simply. Don’t juz live within our means. Live BELOW our means. And keep our intentions pure.

    If we are strategic now, we can take advantage of any financial headwinds that come our way.

    At least we won’t be saddled in debt. The modern-day slavery.

    Live in this world. Live for the next.

    And God Knows best. Wallahualam.

     

    Source: Syed Danial

  • Till Debt Do Us Part – Malay Weddings No Longer A Budget Event

    Till Debt Do Us Part – Malay Weddings No Longer A Budget Event

    KUALA LUMPUR, Dec 24 ― Dr Farah’s wedding celebration last year comprised three receptions costing a whopping RM95,000 that forced her to take a RM15,000 loan even after getting financial help from her family.

    The 30-year-old doctor, who asked to speak using a pseudonym, said that her father had sponsored RM15,000 for the reception at his home state in Kelantan, while her husband’s family spent RM15,000 for their wedding dinner in Putrajaya.

    “My mum’s a doctor, my dad’s a doctor and three of us siblings are doctors. If we do a very simple wedding, people will wonder why we are doing a very simple wedding when we’re doctors,” Dr Farah told The Malay Mail Online in a recent interview.

    “That was my mum’s thinking. My mum’s function was very grand. There were dancers, ‘silat’ (Malay martial arts) performers, an MC who was hired,” she said, adding that the third reception, which was for her mother’s side of the family in Selayang, cost RM30,000. There were separate receptions for her parents as they are divorced.

    Dr Farah said that she and her 29-year-old husband spent another RM35,000 on items like dowry, a jazz band at one of the receptions, silat performers, accommodation for her in-laws who are from Johor, invitation cards, decorations, clothes, wedding rings and make-up.

    Despite the exorbitant cost of the wedding, however, Dr Farah said that she and her husband managed to buy a condominium unit in Putrajaya.

    Seasoned wedding planners say that the cost of an average wedding, across all races, has soared to above RM50,000, causing some couples to take out personal loans to pay for their nuptials if they are unable to get much financial support from their parents.

    At Malay and Indian weddings, food domes, food stations and buffets are common, said Leticia Hsu, president and co-founder of the Association of Wedding Professionals (AWP)

    According to wedding planners, the dowry given by the groom’s family to the bride’s side among the Chinese ranges from a few hundred to tens of thousands of ringgit.

    For the Malay community, the dowry, or “wang hantaran” gifted by the groom to the bride’s family is between RM10,000 and RM18,000 for low to medium-range weddings, and RM50,000 for high-end weddings. Indian Malaysians, on the other hand, generally do not practise the dowry custom.

    Another wedding planner, Nasrul Nasaruddin, said that the average Malay wedding costs between RM50,000 and RM80,000 if it is held at a convention centre or a tent. But the cost shoots up to RM300,000, or even a million ringgit if it is held at a five-star hotel.

    “For five-star hotels, the standard rate is RM200 per pax, depending on the package,” Nasrul told The Malay Mail Online at a recent interview.

    The founder of Nas Great Idea added that guests usually give RM200 “angpows” (envelopes containing cash gifts) at Malay weddings held at five-star hotels, breaking away from the tradition of giving gifts. If the wedding reception is held at a tent, both gifts and angpows are generally given.

    nazrul-wedding-planner

    Nasrul, who started his business 12 years ago, said that the Malay wedding reception is typically sponsored by the bride’s family. But if both partners live in different states, the groom’s family may also organise their own dinner. Inviting 1,000 guests to a Malay wedding reception is not unusual.

    “For high-end weddings, they will have a ceremony at the bride’s, groom’s, for the media, VIPs. So, in total, three to five receptions. For politicians, they have receptions at their home state where they invite lots of people, up to 15,000,” he said.

    Nasrul said that decoration is key for Malay weddings and described previous weddings he has organised, such as creating a glass floor with flowers underneath at the stage area where the “pelamin”, or the traditional wedding dais that represents the bridal couple as the king and queen sitting in state, is located.

    “For high-end weddings, the decoration costs between RM100,000 and RM500,000,” he said.

    “The trend now is for massive pelamin decoration that catches your eye. Five years ago, it was stiff pelamin decor ― flowers and pillars. Now, they transform the whole ballroom, like turning it into a garden of flowers, a Japanese garden with bonsai trees, Oriental with cherry blossoms, European with Roman pillars, or Minangkabau style, Javanese style, Acheh style, or Moroccan style with a dome and stained glass,” he added.

    Nasrul, who mostly plans Malay weddings and some high-end Chinese or Indian ones, said recently that he is organising a “Chengdu style” wedding for a Chinese tycoon next year, with the ballroom lined with a structure resembling the Great Wall of China and transformed into a garden with pagodas.

    The lavish wedding of celebrity couple Rozita Che Wan and Zain Saidin on December 11, dubbed the wedding of the year, was reported by Malay-language daily Harian Metro last month to have received a sponsorship of RM13 million.

    The newspaper also reported that the actress would receive RM23,200 in “wang hantaran” and a wedding ring estimated to cost RM93,000.

    “Wang hantaran” for the average Malay couple can be equally expensive, Dr Farah noted, saying that some of her friends had splurged on luxury watches and handbags that cost tens of thousands, despite not being able to afford them, as the “wang hantaran” is displayed prominently at the reception or ceremony.

    “My friend bought a Maurice Lacroix watch, which cost RM20,000, even though he has only been working for two years,” said Dr Farah. “We live in a materialistic world.”

    Excessive spending on weddings has also strained newlyweds’ relationships, with Dr Farah observing that some of her friends have even gotten divorced after splurging on their big day because of financial concerns over starting a family, or even buying a car.

    Nasrul said that local weddings typically have a huge number of guests, unlike more intimate Western nuptials, because Malaysians fear offending others.

    “Malaysians are very sensitive. If you hear that your friend is getting married, you will feel that there is something wrong if you’re not invited. That’s why they invite all,” he said.

    He added that he charges clients between RM20,000 and RM30,000 on average to organise the decorations for their weddings, though his fees start at RM5,000.

    According to Nasrul, honeymoons for Malaysian newlyweds, which are not included in the wedding expenditure, cost at least RM5,000 for local or South-east Asian spots, and above RM50,000 for trips to Europe, where the popular destinations are Paris and Rome.

     

    Source: www.themalaymailonline.com

  • Experts: GST Set To Increase To Pay For Social Spending

    Experts: GST Set To Increase To Pay For Social Spending

    While the Government has raised income tax rates for top earners in Singapore for a more progressive tax system, taxes paid by a broader swathe of Singaporeans, such as the Goods and Services Tax (GST), will probably go up in the coming years to pay for social spending, said tax experts and economists.

    The GST could go up after next year to 9 or 10 per cent, in line with the Asia-Pacific average. Other taxes the Government could raise include consumption taxes, stamp duties and property taxes, they said.

    On Tuesday, Finance Minister Tharman Shanmugaratnam had dispelled the notion that the Government had adopted a “Robin Hood” strategy for this year’s Budget by taxing the rich more to give to the poor. He said the bulk of the spending is for the common interest and not one particular group.

    “This is our society… We need to take collective responsibility,” said Mr Tharman, who is also Deputy Prime Minister, on a televised forum on Channel 5.

    PricewaterhouseCoopers tax partner Koh Soo How said Mr Tharman’s words signal a continued shift towards a “broad-based” system that reaps revenue from indirect taxes such as the GST. Noting the Government had committed not to raise the GST for five years during the 2011 General Election, he said any hike would probably take place in 2016 or 2017.

    On the other hand, Ernst & Young Solutions head of tax Chung-Sim Siew Moon does not expect a hike in the GST before 2020. “The minister has indicated that the revenue measures that have been put in place will be sufficient for the increased planning needs until the end of the decade,” she noted.

    The GST contributes the second largest share, after corporate income taxes, to Singapore’s total operating revenue, contributing about 16.5 per cent in Financial Year 2014.

    Taxes such as the GST, which are collected from the domestic population, can be raised without affecting Singapore’s international standing in terms of tax competitiveness, Mr Koh said. He noted that many countries, including the United Kingdom, Malaysia and countries in the European Union, are also gradually increasing tax revenue from indirect taxes. Indirect taxes include consumption taxes such as duties on alcohol, tobacco and petrol.

    Mr Koh added: “Tools such as GST vouchers are in place for the Government to make adjustments to alleviate the burden on low-income taxpayers.”

    KPMG Singapore head of tax Tay Hong Beng also pointed out that consumers have a degree of choice as to whether to consume and pay consumption taxes.

    Experts also expected the current income tax rates to hold. Noting that only about 30 per cent of all Singapore residents pay income tax, Mr Tay said increasing the tax burden on a minority of taxpayers “might not be the fairest way forward”.

    “Taking the concept of ‘collective responsibility’ further, the best option remains to grow the Singapore economy. A growing economy directly increases the takings from taxation without the need for excessively high tax rates,” he said.

    Mr Koh from PwC pointed out that raising the top marginal rate of personal income tax beyond the 22 per cent announced during Monday’s Budget statement may hurt Singapore’s competitiveness.

    In line with the global shift from direct to indirect taxation, Mr Tharman on Monday also announced an increase in petrol duties. Duties on tobacco, alcohol and gambling were also raised last year, with alcohol taking the steepest hike of 25 per cent.

    Nanyang Technological University economist and Assistant Professor Walter Theseira said taxpayers can expect to pay more in the medium and long term, with higher-income earners contributing a larger share. The proceeds can fund social initiatives to help the unemployed, and support medical expenses and retirement provisions for middle- and lower-income groups.

    “It is fair that we all are asked to pay a bit more to fund them, although of course in general the more fortunate amongst us should contribute a larger share,” said Asst Prof Theseira.

     

    Source: www.channelnewsasia.com

  • Economists Expect Budget Surplus For FY2014

    Economists Expect Budget Surplus For FY2014

    Measures to help older Singaporeans, such as the S$8 billion Pioneer Generation package, were a big part of Budget 2014.

    Factoring that in, along with other measures and the Net Investment Returns Contribution, the Government had projected an overall budget deficit of around $1.2 billion or about 0.3 per cent of the GDP.

    However, economists estimate that FY2014 could turn in a budget surplus. United Overseas Bank is forecasting an overall budget surplus of S$390 million. DBS Bank is projecting a surplus at S$1.9 billion, and OCBC Bank at around S$1.3 billion.

    “In terms of the fiscal picture, it still looks fairly healthy as far as operating revenue is concerned, because the first nine months of FY2014, we are still running at close to 8 per cent above trend,” said Ms Selena Ling, head of Treasury Research and Strategy at OCBC.

    “And that’s thanks really to income taxes being stronger than expected, and of course, GST also being flat to modest growth year-on-year. Nevertheless we still expect operating revenue to come in above what was the FY2014 plan.”

    UOB economist Francis Tan said: “Due to pretty strong GDP growth in 2013, that contributed to the income from taxation and corporate taxation in FY 2014. We are thinking that the corporate and income tax – which is the largest still, in terms of share of Government’s total revenue – we are thinking that it actually grew around 4.2 per cent year-on-year. In fact, it could be coming in better than what we saw in 2013, which was a 3.6 per cent gain during that time.”

    Economists said the fairly resilient income and corporate earnings growth will support tax revenue collections. And it is expected to offset the drop in revenue from stamp duties. UOB projects that the revenue from stamp duties for FY2014 could fall 33 per cent year-on-year to about S$2.9 billion. That is largely due to the weaker property market which has been affected by a slew of cooling measures and loan curbs.

    UOB added that tax revenue from motor vehicles could contract marginally (0.5%) as the decline in motor vehicle sales stabilised. Meanwhile, it estimated that betting taxes collected in 2014 may trend higher at 4.6 per cent, possibly due to the increase in betting duty rates on lotteries from July 2014.

    For FY 2015, economists are expecting the government to continue to commit substantial amount of funds for social programmes. They include initiatives like the Skills Future Jubilee Fund to help Singaporeans build skills for the future, as well as the Silver Support Programme to assist needy seniors.

    “I think what we will see in this Silver Support scheme is that it will come in similar form as the Pioneer Generation Package which we saw last year. I expect the Government to set aside a sum of about S$10 billion to S$12 billion, where by it will put the sum in this fund for investment, and returns from investments will be used to find this Silver Support Scheme,” said DBS Bank’s senior economist Irvin Seah.

    UOB is forecasting a special transfer of S$11 billion for FY2015, while OCBC puts it at around S$12 billion.

    DBS is projecting an overall budget deficit of S$1.3 billion for FY2015, but OCBC expects to see a surplus of S$200 million, and UOB a surplus of S$710 million.

     

    Source: www.channelnewsasia.com