01 TAXATION, GST, CESS

FORMULA ONE (F1) CESS 2013 Frequently Asked Questions General 1. Who is subjected to the Formula One (F1) Cess? All tourist hotels are subject to the F1 Cess. Tourist hotels include all hotels previously gazetted for purposes of collecting Cess under the Singapore Tourism (Cess Collection) Act.  New hotels deemed to be tourist hotels will also be required to make a contribution via the F1 Cess. 2. Do I need to register my hotel for the F1 Cess? How do I register for the F1 Cess? You are automatically registered for F1 Cess, once your hotel is gazetted under the Singapore Tourism (Cess Collection) Act. Accordingly, thereupon as a gazetted hotel, you are required to pay the F1 Cess. 3. Are there any forms that I need to submit? How do I submit my forms? You are required to submit the F1 Cess Payment Form to STB. To download the form, please click here. 4. What is the submission deadline for the F1 Cess Payment Form and payment? The F1 Cess Payment Form and F1 Cess payment are to be submitted within two months after the end of the F1 event i.e. by 22 November 2013. 5. How do I pay the F1 Cess? Who do I pay the F1 Cess to? Kindly issue a crossed cheque payable to Singapore Tourism Board, and write the name of your hotel and Cess Reference Number on the reverse side of the cheque. The cheque accompanied by your F1 Cess Payment Form should be sent to: Singapore Tourism Board 1 Orchard Spring Lane Tourism Court Singapore 247729 Attn: Financial Operations Department – AR Section (F1 Cess) Please note that STB does not accept post-dated cheques. No receipt will be issued for cheque payment. Do ensure that your cheques reach us by the due date to avoid a late payment penalty. 6. What is the penalty for paying late or not paying F1 Cess? A penalty equal to 5% of the F1 Cess shall be payable after 22 November 2013.  If the F1 Cess outstanding is not paid within 60 days of the imposition of the penalty, an additional penalty of 2% of the F1 Cess shall be payable for each completed month that the F1 Cess remains unpaid commencing 22 November 2013. The total additional penalty shall not exceed 50% of the amount of F1 Cess outstanding.     Rates of F1 Cess 7. How many room nights does the F1 Cess cover and for which period? The F1 Cess is applied on a period of four days – from Thursday, 19 September to Sunday, 22 September 2013, both dates inclusive.   8. What are the F1 Cess rates? Why are there different levels of contribution for different hotels? The F1 Cess rates are 30% of the total room revenues for trackside tourist hotels, and 20% of the total room revenues for all other tourist hotels. Hotels at different locations are likely to benefit to varying extents. For instance, hotels that have a view of or are in close proximity to the race track should be able to command a much higher room rate than the other hotels. Hence, it is deemed reasonable for these trackside hotels to make a contribution towards the staging of the race. 9. Will the Cess be imposed on rooms that have been sold during this period but have not yet been paid for? What about pre-collected room revenues, for e.g. in the event of “no shows”? Yes, all rooms sold during this period are subjected to the F1 Cess. This includes 1) Rooms that have not been paid for (e.g., on credit terms), 2) Rooms where payment was pre-collected, and 3) Rooms where an amount was charged for cancellation or “no-show”. Thus, all room revenues collected or are accruable to rooms sold during this period must be reported as paid lettings.  10. Will the hotels be taxed for early check-in and late check-out? Only rooms sold during the F1 Cess period (i.e. 19 – 22 September 2013) will be subjected to the F1 Cess and this includes early check-in and late check-out during this period. However, early check-in and late check-out which falls outside the period will not be subjected to the F1 Cess. 11. Will the F1 Cess payment be refunded to the hotels if there are cancellations of room bookings? What is the validity period for refunds? Who do I submit the refund request to? Yes, refunds will be made with proper documentation evidence. The window period for refunds is up to one year of the end of the event i.e. by 22 September 2014. Please submit any refund request to STB. For example, non trackside tourist hotel cost S$100 per room night excluding GST. If the cancellation entitles the hotel to charge the guest 40%, the amount that can be refunded to hotel is S$100 x 60% x 20% = S$$12. 12. Why is there a need to provide information for 16, 17, 18, 23 & 24 September 2013 since F1 Cess is not levied on the revenue earned on these days? [Note: Race days are from Friday to Sunday, 20 to 22 September 2013.  But F1 levy period for 2013 will start from Thursday, 19 September 2013 for 4 nights, ie. 19 to 22 September2013 inclusive.] Although 2013 F1 hotel levy takes effect from Thursday, 19 September 2013 to Sunday, 22September 2013, the information collected for a broader timeframe will allow for more comprehensive pre- and post-race visitor trends Mechanics of F1 Cess 13. How is the F1 Cess calculated? The F1 Cess is based on the total room revenues during the stipulated period. Using the below official invoices to illustrate, if the room charge is S$100 (excluding ancillary charges), the F1 Cess will be $30 for trackside tourist hotels and S$20 for all other tourist hotels. (A) Room Charge S$ 100.00 (B) Breakfast S$   40.00 (C)Telephone S$   10.00 Total (A+B+C) S$ 150.00 Service Charge 10% S$   15.00 GST  7% S$   11.55 Total Reflected on Guest’s Bill S$ 176.55 F1 Cess collected from trackside tourist hotel @ 30%    è       S$ 30.00                                                                                     (30% of S$ 100) F1 Cess collected from all other tourist hotel @ 20%     è       S$ 20.00                                                                                     (20% of S$ 100) The breakdown between the room revenue and other revenue components in the “F1 CESS PAYMENT FORM” should tally against the  invoice to hotel guest. If the invoice the hotel guest is reflected as a package price, without breakdown into room and non-room components, the F1 Cess will be calculated based on the package price. Package Price S$ 500.00 Service Charge 10% S$   50.00 GST  7% S$   38.50 Total Reflected on Guest’s Bill S$ 588.50 F1 Cess collected from trackside tourist hotel @ 30%    è      S$ 150.00                                                                                     (30% of S$ 500) F1 Cess collected from all other tourist hotel @ 20%     è      S$ 100.00                                                                                     (20% of S$ 500)   * The above illustration uses official invoice as the source document for the F1 Cess payment submission. You may use other source of supporting document, for example, system printed revenue distribution, on condition that the submission figure can be audited. The onus of declaring accurate and complete information remains the responsibility with the Hotel. 14. Are hotels required to reflect the F1 Cess as a separate item on the bill of hotel guests? No, the F1 Cess should not be reflected on guests’ bills as a separate item. The levy is considered a business tax (i.e. more like corporate tax), as opposed to a consumer tax (i.e. the previous 1% cess and 7% GST). 15. Are hotels required to keep records for audit purposes? Yes, hotels are required to retain relevant and sufficient records for a minimum period of 2 years for audit purposes. Last updated on 13 August 2013

01 Finance Matters: Example 16 Solution

A salesman buys a second-hand car for $40000 and hires it out for a period of 24 weeks at a charge of $520 per week . Insurance costs him $1800 and repairs during the   period cost $450. He then sells the car for $38500.

He buys another car for $40000 and plans to hire it out at a lower weekly rate, but, in addition, he imposes a mileage charge of 15¢ per km travelled.

He estimates that the car will on average travel 600 km per week and that at the end of the 24 weeks, he will again be able to sell the car for $38500.

(a)  Calculate the profit made on his first transaction.                                                           [3]

       Given that for the second car the charges for insurance and repairs remain the same

       and his profit is to be 15% of his initial outlay of $40000, calculate

(b)  the amount of money he must make from the rental of car,                                            [3]

(c)  the weekly rate he must charge to make this profit.                                                        [2]

SOLUTION

(a) 24 x 520 - 1800 - 450 = 10230
10230 +38500 -  40000 = $8730

(b) 0.15 x 40000 + 450 +1800 +40000 - 38500 = $9750

(c) (9750 - 0.15 x 600 x 24)/24 = $316.25

01 EXCHANGE RATE

What is CURRENCY EXCHANGE?

Maybe you've traveled to Mexico or Canada, and exchanged your American dollars for pesos or Canadian dollars. Or, perhaps you've traveled from England to Japan and exchanged your English pounds for yen. If so, you have experienced exchange rates in action. But, do you understand how they work?

You've probably heard the financial reporter on the nightly news say something like, "The dollar fell against the yen today." But, do you know what that means?

In this article, we'll tell you what exchange rates are and explain some of the factors that can affect the value of currency in countries around the world.



source: http://money.howstuffworks.com/exchange-rate.htm

01 HIRE PURCHASE

What is hire purchases?

Hire purchase is a method of buying goods in which payment of purchase price is spread over a specific period of payment of an initial deposit followed by regular installments. 

The deposit is called down payment.

Items that can be bought through hire purchases:

1. Mobile devices
2. Motor vehicles
3. Computers
4. Industrial machinery
5. Equipment
6. Furniture

Advantages of buying through hire purchase:

1. You do not need large amounts of cash to buy an asset
2. The seller is more willing to allow you to make small regular payments as the assets stay in his/her ownership until you have made all the repayments
3. As the repayment amounts are fixed, it is easier to budget or manage your cash flow
4. Higher purchase loans are handy for businesses who are buying assets that do not qualify for fixed assets loans

Disadvantages of buying through hire purchase:

1. You end up paying more for the asset than you would if you paid outright. On top of that, you would have to service the interest on the loan
2. The seller can take back the asset if you fail to make a scheduled repayment. This is true even if you have already paid a substantial amount for the asset

source: http://www.infinitifinancialservicesuk.com

01 APPLICATION OF MATHEMATICS IN THE REAL WORLD: SCENARIO 2

KNOWLEDGE & SKILLS

Enable students to

·      develop the necessary process skills for the acquisition and application of mathematical concepts and skills;

·      develop the mathematical thinking and problem solving skills and apply these skills to formulate and solve problems;

·      recognise and use connections among mathematical ideas, and between mathematics and other disciplines;

Scenario 2

SP Services supplies electricity to households and businesses in Singapore. It also provides billing and payment collection on behalf of various utility service providers such as the Public Utilities Board for water charges, City Gas for gas charges and the respective refuse companies for refuse removal fees. The bill charges are for the period reflected here (ie 21 May 2013 to 19 Jun 2013, as shown in the sample bill). 

Source: http://www.singaporepower.com.sg/irj/servlet/prt/portal/prtroot/docs/guid/b051fb9b-cb6c-2e10-c498-b8af349b0176?spstab=Our%20Services




1. What information does each component of the bill give?
2. Provide information on what should be the (i) constants and (ii) variables.
3. If the person wants to reduce his Total Current Charges what considerations should be taken?
4. POST your responses as comments.

01 APPLICATION OF MATHEMATICS IN THE REAL WORLD: SCENARIO 1

KNOWLEDGE & SKILLS

Enable students to

·      develop the necessary process skills for the acquisition and application of mathematical concepts and skills;

·      develop the mathematical thinking and problem solving skills and apply these skills to formulate and solve problems;

·      recognise and use connections among mathematical ideas, and between mathematics and other disciplines;

Scenario 1

The Samsung Galaxy S4 was released in April 2013. All three telcos released their price plans for the Singapore market. 

1. Based on your own personal usage and affordability which plan would you subscribe to and why?
2. Your analysis should include what should be the (i) constants and (ii) variables.
3. POST your responses as comments.

reference: http://asia.cnet.com/m1-starhub-and-singtel-reveal-samsung-galaxy-s4-price-plans-for-sg-update-62221208.htm