Low earners will be key winners.
According to DBS' report on the Budget 2013's goal of fostering an inclusive society, to cushion the impact of widening income disparities, the government has proposed a progressive tax structure by imposing higher tax on luxury cars and property tax for high end residential properties while subsidising the lower income brackets.
Key winners in this budget are the lower income bracket group which will benefit from top-ups, additional GST vouchers and Tax rebates to help them cope with the rising cost of living.
Here's more from DBS:
Ensuring social mobility, enhancing employability as well as strengthening the social safety net continues to be in the spotlight. These key thrusts will remain the key focus for policymakers given the ageing population.
While we do not foresee the tax changes to affect property prices, some moderation in vehicles sales can be expected given that the COE premiums for high end cars are already high at present.
More importantly, the moves have reinforced the deliberate shift towards a more progressive fiscal stance and there could be more of such hikes going forward if the property market and car sales remain buoyant.
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