Singapore's Tax Revenue Surges 13.1% Amid Post-COVID Economic Rebound

06 Sep, 2023

Singapore's Tax Revenue Surges 13.1% Amid Post-COVID Economic Rebound

In Singapore's 2022/23 financial year, tax revenue reached an impressive S$68.6 billion (US$50.3 billion), marking a substantial 13.1% increase compared to the previous year. This significant surge can be attributed to the nation's remarkable economic recovery following the conclusion of the COVID-19 pandemic, as reported by the Inland Revenue Authority of Singapore (IRAS) on September 6th.

In terms of arrears rate for income tax, Goods and Services Tax (GST), and property tax, the numbers have shown an encouraging decline to S$363.1 million, translating to 0.59% of the total, compared to 0.64% in the preceding financial year. IRAS emphasized that the taxes collected play a pivotal role in supporting Singapore's economic and social programs, aimed at fostering quality growth and an inclusive society.

The boost in tax revenue extended across various tax categories. Notably, corporate income tax experienced a substantial increase of S$4.9 billion, driven by buoyant corporate earnings. GST also saw a rise of S$1.5 billion, primarily attributed to increased consumption and a rebound in international arrivals. Furthermore, individual income tax recorded a noteworthy uptick of S$1.3 billion, reflecting higher personal incomes.

However, it's worth mentioning that stamp duty collection experienced a decline, decreasing by S$800 million or 12%, primarily due to a decrease in transaction volume compared to the previous year.

During the last financial year, IRAS disbursed a total of S$4.6 billion in grants to support more than 120,000 enterprises in their efforts to promote local hiring and wage growth for Singaporean citizens. These grants were distributed under various schemes, including the Jobs Growth Incentive (JGI), Progressive Wage Credit Scheme (PWCS), Senior Employment Credit (SEC), and Small Business Recovery Grant (SBRG).

Notably, the JGI allocated S$2.7 billion to over 68,000 businesses, with an emphasis on local hiring to create sustainable employment opportunities for Singaporeans. The enhanced PWCS directed S$1 billion towards providing transitional wage support to over 70,000 employers, with a focus on co-funding for lower-wage workers. The SEC channeled S$319 million to more than 95,000 employers who hired Singaporean workers, aiding them in adapting to cost increases stemming from higher retirement and re-employment ages. Lastly, the SBRG disbursed S$136 million to support more than 41,000 small businesses affected by COVID-19 restrictions, offering one-off cash payouts in June 2022.

Corporate income tax emerged as the largest contributor to IRAS' revenue collection, accounting for S$23.1 billion or 33.7% of the total. Following closely, individual income tax amounted to S$15.5 billion, constituting 22.6% of the revenue, with 83% of this figure originating from taxpayers with annual incomes exceeding S$150,000. Additionally, GST contributed S$14.1 billion, equivalent to 20.5%, while stamp duty accounted for S$6 billion or 8.7%. Property tax (S$5.1 billion), betting taxes (S$2.8 billion), and withholding tax (S$2.1 billion) comprised the remaining segments of the tax revenue.

IRAS also disclosed that it conducted audits and investigations in 9,019 cases during the 2022/23 financial year, leading to the recovery of approximately S$499 million in taxes and penalties.