The collective sale fervour in 2017 not only brought billions of dollars just for the home owners but has also been a huge boost for the taxman.
The IRAS (Inland Revenue Authority of Singapore) reported to have collected S$50.2 billion in tax revenue in the financial year ending on 31st March, 2018.
This is an increase of more than S$3 billion against tax collected in the previous financial year. The increase has been attributed to a healthy economy, increase in corporate tax collection and 50% increase stamp duty collection.
It has been reported that that S$4.9 billion stamp duty was collected during this period which is an increase of 49.6% as home owners made large sums of money on en bloc sales and there was increase property launches attracting people.
The Government had to step in and announce new cooling measures in July to pre-empt the chances of runaway prices which has dented the mood in the market.
As per the data released by IRAS 10% of its total revenue collection came from stamp duty which stood next only to corporate income tax at S$15 billion increasing from S$13.6 billion and accounting for nearly 30% of the revenues.
Income Tax that includes individual income tax (rose to S$10.7 billion from S$10.5 billion); corporate income tax and withholding tax totalled S$27.2 billion which is an increase of 6.3% compared to S$25.6 billion collected in the previous financial year.
The IRAS which came up with its annual report on Wednesday (Sep 26) stated that there was 6.8% increase in overall tax revenue collection which has been attributed to increase in stamp duty collection given the exponential rise in property transactions.
Improved corporate earnings also swelled the corporate income tax collection which grew 3.6% in 2017 which was more than what was projected earlier. Collection from property tax revenue though remained the same as last year at S$4.4 billion.
Taxes collected by IRAS amount to 66.2% of Government’s total operating revenue and 11.1% of Singapore’s GDP.
Apart from income tax, property tax and stamp duty collection GST (Good & Services Taxes) and Betting Taxes are the other two major sources of taxes for the government.
GST collection stood at S$11 billion which is almost the same as last year. Betting taxes which includes private lotteries duties, betting duty and casino taxes also remained the same as last year at S$2.7 billion. In a statement released to the media IRAS stated that a tax collection cost was 0.84% for every dollar which is low.
The annual report applauded the taxpayers citing 96.5% of individual taxpayers having filed their returns voluntarily and 90.1% having paid their taxes on time. In case of corporate income taxes the percentage of voluntarily returns and payment on time stood at 82.1% and 84.9% respectively.
Commissioner of Inland Revenue, Ng Wai Choong stated that IRAS has taken several initiatives towards speeding up transformation.
He cited the example of digital initiatives which have added convenience in filing returns, paying taxes and meeting compliances. He also said that Virtual Assistant and online tool and interactive start-up kit introduced for new companies offers taxpayers answer to most of their doubts and IRAS shall continue to streamline its services to improve tax collection and make it easy for the taxpayers.
Its annual report also stated that IRAS had investigated and audited 10,726 taxpayers which led to recovery of taxes and penalties amounting to S$384 million in the last ended financial year. Corresponding figures for the previous financial year stood at 10,626 taxpayers where there was recovery of S$332 million.
According to Mr Ng said IRAS has been continuously reviewing its tax policies with the aim to make the country’s tax system robust and improve compliance.
He added that in the last financial year as many as 28 tax policies has been reviewed which includes interest penalty payments, ABSD’s deductibility and timing of deductions to ensure property developers to improve transparency in the process
He also informed that digital services would come under the purview of GST from 1st Jan 2020.
He said that IRAS is currently consulting various stakeholders for preparing GST’s groundwork and so far, 850 businesses as well as associations have shared their views on this subject.