Singapore raises tax rate for top earners
Published: 24 Feb 2015
Newspaper section: Business
SINGAPORE: Singapore will raise personal income-tax rates for the country’s top earners as the government shifts the burden of higher spending for an ageing population to its wealthiest residents.
“Expenditure will increase significantly in coming years as more money is allocated for development,” Finance Minister Tharman shanmungaratnam said in his budget speech yesterday.
“The government will extend about $7.5 billion (US$5.5 billion) to businesses over three years to help them cope with rising costs, and making changes to the national pension system to benefit older and middle-income workers.”
The move to increase tax rates is part of efforts to avoid sustained annual budget deficits as policy makers boost spending on infrastructure and health care. The island had its first budget shortfall since 2009 last year, and the finance minister said the tax increase for high-income earners would strengthen future revenues in what he called a “calibrated move.”
“We have assessed that it should not significantly dent Singapore’s competitiveness,” Shanmugaratnam said. “Tax rates are not the only way we stay competitive.”
Singapore will raise its top marginal rate to 22% from 20%, while others in the top 5% of earners will also see a bigger tax bill. The adjustments will affect those making at least S$160,000 annually, and will apply starting with income earned in 2016.
Singapore raises tax rate for top earners
Published: 24 Feb 2015
Newspaper section: Business
SINGAPORE: Singapore will raise personal income-tax rates for the country’s top earners as the government shifts the burden of higher spending for an ageing population to its wealthiest residents.
“Expenditure will increase significantly in coming years as more money is allocated for development,” Finance Minister Tharman shanmungaratnam said in his budget speech yesterday.
“The government will extend about $7.5 billion (US$5.5 billion) to businesses over three years to help them cope with rising costs, and making changes to the national pension system to benefit older and middle-income workers.”
The move to increase tax rates is part of efforts to avoid sustained annual budget deficits as policy makers boost spending on infrastructure and health care. The island had its first budget shortfall since 2009 last year, and the finance minister said the tax increase for high-income earners would strengthen future revenues in what he called a “calibrated move.”
“We have assessed that it should not significantly dent Singapore’s competitiveness,” Shanmugaratnam said. “Tax rates are not the only way we stay competitive.”
Singapore will raise its top marginal rate to 22% from 20%, while others in the top 5% of earners will also see a bigger tax bill. The adjustments will affect those making at least S$160,000 annually, and will apply starting with income earned in 2016.
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