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Singapore's Tax Revenues Up, Despite Economic Slowdown

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

02 November 2012


According to the latest Macroeconomic Review from the Monetary Authority of Singapore (MAS), the government’s tax revenue increased slightly in the first half of 2012, despite a significant slowdown in economic growth.

Even though the global economy and, consequently, world trade flows have experienced a significant loss of momentum in recent months, especially as the European debt crisis has persisted, the growth in Singapore’s gross domestic product (GDP) is only expected to slow down to somewhere around 2.5% for the whole of this year, after growth of 4.8% in 2011.

The resilience that is therefore being shown in the underlying Singaporean economy has also allowed tax revenue to experience a small rise from SGD25.5bn (USD20.9bn) in the first half of last year to SGD26.7bn (16% of GDP) in the first half of 2012.

Income taxes, other indirect taxes including foreign worker levies, and fees and charges, were the main contributors to that increase, but MAS said that the impact of the economic slowdown was most evident in goods and services tax collections, which fell by SGD0.2bn from a year ago to SGD4.3bn in the first six months of this year.

Income taxes rose marginally to SGD10.6bn during the period (an increase of SGD0.1bn), mainly due to higher personal income taxes. Although, as the MAS pointed out, the government reduced marginal tax rates in 2012 for the first SGD120,000 of chargeable income, tax receipts grew as the labour market remained tight and wages and bonuses increased, despite the lower economic growth.

While home prices remained high and transactions picked up, property tax and stamp duty collections rose. Stamp duty rates have increased following the hike in seller stamp duties and the imposition of an additional buyer’s stamp duty.

TAGS: tax | economics | property tax | gross domestic product (GDP) | goods and services tax (GST) | Singapore | fees | stamp duty | revenue statistics | individual income tax | services

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