q Lower personal income tax rates

The top rate of personal income tax will be lowered to 21% for year of assessment 2006 and 20% from year of assessment 2007. The marginal rates for intermediate income brackets will also be lowered accordingly. See table on revised tax rates.

 Table 3. Revised  tax rates for year of assessment 2006 and 2007

Effectively, the rates are lowered in each subsequent year from year of assessment 2006 to year of assessment 2007 by 0.25% for income bracket between $20, 0001 and $80, 000, 0.5% for the income bracket between $80, 0001 and $16, 000, and 1% for the income brackets above $160, 000.or intermediate

q Tax relief cap on voluntary CPF contribution by the self-employed

The tax relief cap on voluntary CPF contributions by the self employed will be raised to align it with the cap for employees with effect from year of assessment 2006.