Major policy changes in Singapore that you must be aware of from Jan 1

Major policy changes in Singapore that you must be aware of from Jan 1

1.Bill passed to tax overseas services like Netflix from 2020

The regime requires overseas vendors to pay GST if they have an annual global turnover above $1 million and makes more than $100,000 in providing digital services to Singapore.

Business-to-business imported services like marketing, IT and management services fall under a reverse charge system. Instead of having service providers collect GST, local GST-registered businesses have to do it for services that they import.

When implemented, the tax is expected to bring in around $90 million of tax revenue each year, said Second Minister for Finance Lawrence Wong. He added that the new rules protect local retailers, who currently have to pay the tax, by levelling the playing field with overseas vendors.

2. INCREASE IN CENTRAL PROVIDENT FUND (CPF) RETIREMENT SUM PAYOUTS

 

Payouts through the Retirement Sum Scheme (RSS), the main CPF retirement payout scheme for members born before 1958, will last up till age 90, instead of the current 95, from next year.

More than a third of members on the RSS who are currently receiving their payouts, or some 60,000 people, will see an increase in payouts, Manpower Minister Josephine Teo announced in Parliament in November.

The new rules will apply to all RSS members who turn 65 from July 1, 2020, and will take effect from Jan 1, 2020, for those who are currently receiving payouts.

 

3. HIGHER BASIC HEALTHCARE SUM

 

The Basic Healthcare Sum – or estimated savings required for basic subsidised healthcare needs in old age – will be raised from $57,200 to $60,000 for CPF members below 65 from Jan 1.

Those who turn 65 in 2020 will have the sum fixed at $60,000, which will not be changed.

Those who are 66 and above in 2020 will see no changes to their cohort’s Basic Healthcare Sum.

The Basic Healthcare Sum is adjusted yearly for members below 65 years of age to keep pace with the growth in Medisave withdrawals. Once members reach 65, the sum will be fixed for the rest of their lives.

 

4.MINIMUM AGE FOR SMOKERS TO BE RAISED TO 20

The minimum age was raised from 18 to 19 in January this year, and will be raised to 21 on Jan 1, 2021, the Ministry of Health (MOH) announced in December 2018.

 

5. TIGHTER FOREIGN WORKER QUOTA

 

The Government is tightening the dependency ratio ceiling, or the proportion of foreign workers a firm can employ, from 40 per cent now to 38 per cent on Jan 1 next year, and to 35 per cent on Jan 1, 2021.

For the subset of S Pass workers – mid-skilled foreigners earning at least $2,300 a month – the quota will be cut from 15 per cent now to 13 per cent on Jan 1 next year, and to 10 per cent on Jan 1, 2021, Finance Minister Heng Swee Keat announced during the Budget speech in February.

 

6.FEWER APPROVED OVERSEAS MEDICAL SCHOOLS

 

Those going overseas to study medicine with the aim of practising as doctors here will have fewer schools to choose from.

The number of approved overseas medical schools will be cut from 160 to 103 from Jan 1 next year, the Singapore Medical Council (SMC) and MOH announced in April.

 

7. COMPULSORY DRONE REGISTRATION FROM JAN 2

 

One rule that will kick in a day later from Jan 2 next year is the mandatory registration of all drones that weigh more than 250g with the Civil Aviation Authority of Singapore (CAAS) before they can be used in Singapore.

This policy change, which comes on top of raising penalties for various offences involving drones, comes after Parliament passed the Air Navigation (Amendment) Bill on Nov 4.

Currently, first-time offenders caught flying a drone without a valid permit could be fined up to $20,000. Repeat offenders could be jailed for up to 15 months and fined up to $40,000.

Going forward, first-time offenders could be jailed for up to two years and fined up to $50,000, while repeat offenders could be jailed for up to five years and fined up to $100,000, as part of stiffer penalties for offences involving all aircraft.

Drone users will have a three-month grace period from Jan 2 to register their devices. They can purchase registration labels online or over the counter at designated post offices, before completing the registration online.

 

 

 

 

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