CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Singapore's Budget Includes Higher Income Tax Hike

Singapore's Budget Includes Higher Income Tax Hike

by Mary Swire,, Hong Kong

24 February 2015

On February 23, Singapore's Deputy Prime Minister and Finance Minister, Tharman Shanmugaratnam, issued his 2015/16 Budget, including measures to support both middle- and lower-income taxpayers.

While granting a PIT rebate of 50 percent – capped at SGD1,000 (USD736) per taxpayer – to all resident individual taxpayers against income tax for this current year of assessment (YA), the Budget also intends to make the personal income tax regime more progressive.

There will be additional bands with higher tax rates on incomes above SGD160,000 from the 2017 YA, including a 22 percent top rate for incomes above SGD320,000 – an increase from the current highest rate of 20 percent.

To support businesses, the 30 percent corporate income tax rebate will be provided for another two YAs (YA 2016 and YA 2017), with a cap of SGD20,000 per company per YA (reduced from SGD30,000 this year).

In addition, while the productivity and innovation credit (PIC) cash bonus will be allowed to lapse this year, businesses will continue to benefit from the PIC scheme itself, which has already been extended until YA 2018, as well as the PIC+ scheme that was introduced in last year's Budget.

Among other tax measures, the carbon emissions-based vehicle tax scheme, which encourages consumers to shift to low emission car models, has been extended by two years from July 1, 2015, to June 30, 2017. The scheme's surcharge and rebate bands have been updated to reflect improvements in vehicle engine technology and the highest rebate and surcharge amount has been increased from SGD20,000 to SGD30,000.

Petrol duty rates will also be increased, but a one-year road tax rebate will be given to petrol vehicles to ease the transition to the higher rates.

The Approved Headquarters tax break has been withdrawn with effect from October 1 this year, but the 10 percent concessionary tax rate for insurance companies and the package of tax concessions (except for the stamp duty exemption) for listed real estate investment trusts have been extended to March 31, 2020.

Overall, for FY2015, Singapore's overall budget deficit is projected to be 1.7 percent of gross domestic product, or SGD6.7bn. This was mainly due to SGD6bn being set aside for future investments in the Changi Airport Development Fund, Special Employment Credit Fund, National Productivity Fund, and the National Research Fund.

Tharman pointed out that the FY2015 Budget would otherwise be "quite close to balance." He confirmed that the Government has sufficient surpluses from its previous years to fund the overall deficit without drawing on past reserves.

TAGS: tax | investment | business | real-estate investment | tax incentives | fiscal policy | vehicle tax | insurance | real-estate | budget | corporation tax | Singapore | tax thresholds | tax credits | excise duty | corporate headquarters | tax rates | stamp duty | tax breaks | individual income tax

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »