Against the worst economic crisis in 60 years, we expect the Singapore government to propose its most expansionary budget during Budget 2009 on 22 Jan. While the government may not be cutting GST to stimulate consumption, we urge it to consider giving taxpayers a tax holiday to allow businesses and households to hang on to as much disposable income as possible as they face slowing/negative cash flows and sharp wage cuts in 2009. This is because of the "extraordinary times" we are in, "requiring speed and decisiveness to address the current economic downturn," in the words of Alcoa's president, Klaus Kleinfeld. Apart from giving households and businesses a huge lift in sentiment and confidence, granting a tax holiday has the added advantage of facilitating a shift to a pay-as-you-earn (PAYE) income tax system. And if global economies were to rebound earlier than expected, the Singapore government would start to benefit immediately because of the PAYE system.