As the COVID-19 pandemic enters the third year and as global economies slowly open up, this year’s Budget seeks to position Singapore for the opportunities and challenges in the post-pandemic world. The Minister for Finance in his Budget Statement said that this year’s Budget “is about charting our new way forward together”. In keeping with this theme, the Budget sets out the key changes to:
While the Budget is forward looking, immediate concerns were also addressed. To provide continued targeted support to households, businesses and workers to mitigate the lingering effects of the COVID-19 pandemic, several support packages were introduced. For example, a S$560 million Household Support Package was unveiled to help Singaporeans with their utility bills, children’s education and daily essentials. In addition, several existing measures such as the Jobs Growth Incentive were enhanced or extended.
Instead of a new wealth tax that is practically difficult to administer in its pure form, several tweaks have been introduced to the existing tax regime to make the tax system more progressive such that the more well-off contribute a larger share to the tax revenue. However, these changes do not rock Singapore’s status as a wealth management hub.
No change to the corporate income tax rate. However, In response to the global minimum effective tax rate under the Pillar 2 Global Anti-Base Erosion rules of the BEPS 2.0 project, the Ministry of Finance (“MOF”) is exploring a top-up tax called the minimum effective tax rate or “METR”.
The GST will be raised to 8% from 1 January 2023 and to 9% from 1 January 2024.
Personal income tax rates will be made more progressive by introducing two additional top tier rates with effect from the Year of Assessment (”YA”) 2024. Also, from YA 2024, the income tax rate for non-resident individuals (except on employment income and certain income taxable at reduced withholding rates) will be raised from 22% to 24%.
The progressive property tax rates for both owner-occupied and non-owner occupied residential properties will be revised for the portion of annual value in excess of S$30,000.
A new Additional Registration Fee (ARF) tier for vehicles with Open Market Value (OMV) exceeding S$80,000 has been introduced. The portion of a vehicle's OMV exceeding S$80,000 will be taxed at 220%.
Learn more about developments to Singapore's tax regime in our series of explainer videos, including the Minimum Effective Tax Rate, Individual Tax and the upcoming phased increase to the country's Goods and Services Tax.
Speak to our Experts