Singapore will cut fuel and property taxes by S$308 million (US$174 million) to ease the pain of an economic slump that has driven the city-state's unemployment rate to its highest in 15 years.
A 5 percentage-point cut in the excise duty on gasoline that was introduced last year and was due to expire on Dec. 31 will stay in force until June 30. A rebate on the diesel tax for taxis will also be extended, the Ministry of Finance said in a press release.
Singapore, which is struggling to recover from last year's worst recession in four decades, is leaving more money with citizens to help them weather the slump. Last week, the government gave up S$651 million in revenue when it decided to raise the tax on goods and services in two stages, revising plans for a single, 2 percentage-point increase from Jan. 1.
Singapore-based owners of commercial and industrial buildings are also getting relief. They will pay S$4,000 less in property tax between Jan. 1 and June 30 and will get an additional 30 percent discount on the remaining tax for the six-month period, the finance ministry said.
With rents in downtown office buildings at the lowest in about a decade and vacancies at a three-year high, according to government statistics, Singapore's property developers are struggling to make a profit.
The US$84 billion economy shrank at a seasonally adjusted annual pace of 10.1 percent in the third quarter from the previous three months. Last month, the government cut its target for full-year growth to between 2 percent and 2.5 percent, from between 3 percent and 4 percent, citing the risk of slowing global demand and the threat of a war in Iraq.
Companies such as Chartered Semiconductor Manufacturing Ltd have fired workers in response to slowing sales. Others, such as computer-scanner maker Seiko Epson Ltd, have shifted operations to Indonesia and other lower-cost countries. That has helped push the jobless rate up to 4.8 percent in September.
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