Tuesday, February 13th, 2018
NEW YORK, Feb 13 — Wall Street’s main indexes were down about a third of a per cent today, falling for the first time in three sessions as caution crept in ahead of crucial data on inflation, which has been the root cause of the recent…
SINGAPORE: Singapore, a city-state famed for the low-tax model that helped transform it from a gritty port town to an Asian Manhattan, is expected to put something unusual in this year’s government budget announcement: a tax increase.
Nine of 10 economists polled by Reuters think authorities on Monday will unveil the first rise in the Goods and Services Tax (GST) since 2007. Policymakers have flagged the need to increase revenue to meet future social spending needs of a rapidly ageing population.
Economists say Finance Minister Heng Swee Keat might also make tweaks to taxes on e-commerce retailers such as Amazon.com. Inc, wealth and sugar when he presents the budget on Monday for the year starting April 1.
Any tax measures would come after Singapore in 2017 had its fastest economic growth in three years, estimated at 3.5%.
“Strong economic growth is a good pull factor supporting the tax hike,” said Francis Tan, an economist for Singapore’s United Overseas Bank.
He expects GST to be increased by 1 percentage point this year to 8%, followed by another 1 percentage point hike next year.
Tan added that there’s an “urgent need” to shift more towards indirect taxes as the tax base for personal income tax could become smaller over the longer term given Singapore’s demographic challenge.
While the rate for Singapore’s consumption tax is one of the world’s lowest, GST is still the government’s second largest source of tax revenue, behind corporate tax.
Singapore introduced its GST in 1994, with a 3% rate. This was raised to 4% in 2003 and 5% in 2004, then to 7% in 2007.
Some economists including HSBC’s Jingyang Chen, who expects a 2 percentage point increase to be announced on Monday, said a higher GST could be accompanied by measures to ease the burden for lower-income families, such as cash transfers and vouchers.
Eight of the 10 economists polled expect the government to widen the net on e-commerce transactions subject to the GST.
Currently, Singapore consumers pay 7% GST on their purchases from Singapore-based online retailers. In contrast, they pay no GST on goods purchased from overseas suppliers if the value of the imported goods is below S$400 (RM1,200).
Several economists also suggested there could additional taxes on wealth, such as an increase in annual property taxes, as well as higher rates on alcohol and tobacco products or even a new tax on sugar consumption.
Michael Wan, an economist at Credit Suisse, estimates that a 2 percentage point increase to the GST would add around 0.6% of GDP to net government revenues annually, after taking into account possible offsetting measures to cushion the impact on lower income households.
Economists estimate a 2 percentage point rise in GST could boost Singapore’s headline inflation rate by 1.0-1.5 percentage points and core inflation – the measure closely watched by policymakers – by even more.
“If the MAS (Monetary Authority of Singapore) sees longer-term inflation risks after GST is implemented, then it would factor that into its policy decisions,” said HSBC’s Chen. – Reuters
LONDON, Feb 13 — Bitcoin is snapping its longest rally since December and retreating before a trendline set from its record high that month. The largest digital currency dropped 2.9 per cent to US$8,579 (RM33,815) as of 12:48pm in London,…
PETALING JAYA: Premier lifestyle property developer, Eastern & Oriental Bhd(E&O) saw its net profit for the third quarter ended Dec 31, 2017, dip by 29.27% to RM21.97 million from RM31.07 million due to high taxation.
Revenue, on the other hand, increased by 36.40% to RM331.89 million in the quarter under review against the RM243.31 million registered in the previous year’s corresponding quarter supported by higher contributions from the property segment on higher sales of completed properties.
The group was subjected to taxes amounting to RM33.70 million in the quarter as compared with the RM16.33 million in the same quarter last year.
“Nevertheless, we are encouraged by the recent sale of properties, especially in our Penang projects. For the remainder of FY18 and for the next financial year we continue to focus selling down our inventory with more innovative pricing packages,” the group said in a Bursa Malaysia filing.
PETALING JAYA: Weida (M) Bhd’s net profit for the third quarter ended Dec 31, 2017 doubled to RM8.61 million from RM4.30 million a year ago mainly due to higher revenue contribution with lower overheads incurred from all segments, except for property development segment.
Revenue also jumped 10% to RM66.45 million compared with RM60.40 million in the previous year’s corresponding quarter.
Moving forward, the directors will ensure continuous efforts to implement measures to improve operating efficiency in achieving sustainable results for the group for the financial year ending March 31, 2018 on the strength of the diversified base of the group which has helped to offset the adverse impacts to the group.
However, the group’s cost of operation will be affected by the recently raised overnight policy rate, which increased Malaysian commercial lending rates. The strengthening of US dollar against the ringgit will also affect its raw material cost.
For the nine months period, net profit fell 11% to RM17.88 million from RM20.01 million a year ago, while revenue decreased 23% to RM183.72 million compared with RM239.92 million in the previous year’s corresponding period mainly due to lower contribution from both works segment and property development segment as the projects were at tail end of completion but the impact has softened by higher revenue contributed from manufacturing segment.
Despite lower revenue, the group’s profit margin improved due to contribution from both manufacturing and works segments for the current financial period.
KUALA LUMPUR: The next Regional Comprehensive Economic Partnership (RCEP) meeting, which will be held at the ministerial level on March 2, will be a crucial one to discuss the progress of the trade deal.
International Trade and Industry Datuk Seri Mustapa Mohamed said today he is confident the meeting, to be held in Singapore, will serve as a platform to bridge the gap between Asean and other countries.
“We are confident that with the commitment from all parties, we can reduce the gap between Asean members and other countries,” he told reporters at the launch of SME Bank Y-Biz Challenge 2018 and MySMEBank Online Application system.
Mustapa said Malaysia still hopes for the proposed trade deal to be sealed this year.
It was reported the Philippines has demanded its RCEP fellow negotiating countries to work towards a speedy conclusion of the agreement.
It said there were complications coming from Australia, China, India, Japan, New Zealand and South Korea.
Meanwhile, the 21st round RCEP meeting was held in Yogyakarta, Indonesia, from Feb 2 to 9. It was attended by the RCEP’s 16 negotiating member countries. At this round the discussions included topics such as trade of goods and services, investments, issues regarding legalities and institutions, as well as the rules of origin.
RCEP is free trade agreement between Asean’s 10-member states and six other countries, namely Australia, China, India, Japan, South Korea and New Zealand. Once sealed, the RCEP will become the largest trade bloc in the world that could boost economic growth of its members.
Also at the launch, Mustapa told reports that the government is concerned about the challenges faced by Proton Holdings Bhd’s dealers and vendors.
“The ministry is currently gathering information and I plan to meet them soon for discussions,” he said in response to a question whether a special incentive would be provided to help Proton dealers upgrade their businesses.
On Monday, Proton encouraged its dealers to upgrade their sales-only centres to integrate sales, service and spare parts to, among others, improve the dealership network and increase customer satisfaction. – Bernama