Singapore's Tax Revenue Doubles In A Decade

by Mary Swire, Tax-News.com, Hong Kong

02 July 2001

According to the Minister for Finance, Dr Richard Hu, Singapore's tax revenue has more than doubled over the last ten years. Speaking at the opening of the Inland Revenue Authority of Singapore (IRAS) conference last week, Dr Hu said: 'This growth in tax revenue has taken place even while the tax burdens of individuals and companies have been progressively lowered over the years.'

He added: 'The growth of tax revenue despite the lowering of tax rates has been made possible by the continued growth in the economy and prosperity of the nation. It is a reflection that earlier tax dollars have been prudently and judiciously invested in our people, our infrastructures and our nation building programmes.'

Singapore's taxes today make up about 78 per cent of the government's operating revenue and IRAS collects more than 70 per cent of the total tax revenue. Income tax rates for individuals have been reduced and rationalized 3 times over the last 10 years from a range of 3.5 per cent to 33 per cent to the current range of zero per cent to 26 per cent. 'In fact,' stated Dr Hu, 'the average income tax burden of a taxable individual is currently only about 7per cent. Similarly, the income tax rate for companies has been progressively reduced from 32 per cent in 1990 to 24.5 per cent with effect from 2002. The property tax rate has also been reduced from 16 per cent in 1990 to 10 per cent in July 2001.'

Dr Hu also spoke of the GST rate which has remained unchanged at a rate of 3 per cent since its introduction in 1994. 'In fact with the GST-related rebates and one-off rebates, two-thirds of individuals, otherwise liable to tax, do not pay income taxes today,' he explained.

Dr Hu concluded his speech by praising the government's 'financial prudence'. He argued that 'an honest and clean government is key to the survival and growth of a country. The government has ... taken care to ensure that taxes are carefully and effectively deployed in a public service that is effective and efficient, and programmes that will yield long lasting returns for the people.'

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