SINGAPORE's annual Budget 2011 offers a bonanza for individuals, professionals and companies, providing benefits of $6.6 billion for Singaporeans.

The 2011 budget incorporates a cash gift for all Singaporeans but the bonanza basically targets the elderly, the lower income and middle income families. The budget introduces a significant reduction in taxes for middle and upper middle income tax payers through a more progressive personal income tax schedule, including a 20 per cent personal income tax rebate, capped at S$2,000 for individual resident taxpayers for YA2011.The personal income tax changes would take effect for YA1012 and are expected to cost the government S$590 million per year.

Besides enhancing Singapore’s appeal as a gateway for investment and encouraging R&D investment and activity through innovation credit, the budget offers companies a 20 per cent corporate income tax rebate capped at S$ 10,000 in the 2011-12 financial year.

According to the Prime Minister Lee Hsien Loong, few countries could match the cash incentives provided in the budget which are intended to help Singaporeans cope with the rising cost of living. This was made possible due to the budget surpluses from past years.

The government expected a basic budget deficit of S$2.2 billion for FY2011 or about 0.7 per cent of the GDP, which is smaller than the basic deficit of 0.8 per cent of GDP in FY2010. However, due to better economic growth, the overall budget deficit is expected to be small at S$0.3 billion or 0.1 per cent of GDP.

Better growth has accounted for about 80 per cent of the increase in revenues over what the government had projected a year ago. The property market had also become stronger, resulting in increases in stamp duties and other revenues.