Singapore will be raising the personal income tax for some of the country’s highest earners to 23% - 24% in Year of Assessment 2024.
In his Budget 2022 speech on Feb 18, Minister of Finance Lawrence Wong stressed that wealth taxes are needed “to build a fairer society”.
See: Singapore Budget 2022: A highly consequential budget and A Budget to rebuild and restore the economy
From the Year of Assessment 2024, chargeable income in excess of $500,000 up to $1 million will be taxed at 23%, from the 22% levied on chargeable income in excess of $320,000 currently.
Similarly, chargeable income in excess of $1 million will be taxed at 24% from Year of Assessment 2024, from the current rate of 22%. The increase is expected to impact the top 1.2% of income tax payers, and raise $170 million of additional revenue per year.
The move comes amid discussions that Singapore needs to introduce a new form of wealth tax in a bid to tackle inequality, a sentiment Wong agrees with.
Higher property taxes
In addition, property taxes will also be raised, with the changes rolled out in two phases over the next two years.
All non-owner occupied residential properties will see taxes raised to 11% - 27% in 2023, and 12% - 36% in 2024, from the current rate of 10% to 20%.
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For instance, a large non-owner occupied detached house in the central area with an annual value of $150,000 will see an annual property tax bill of about $43,000 a year, up from the current $24,000 bill.
Tax rates for owner-occupied residential properties will also be raised to 5% - 23% beyond the first $30,000 annual valuation by 2023, and a further increase to 6% - 32% in 2024.
The current rate ranges from 4% to 16% beyond the first $8,000 of a property’s annual value.
According to Wong, the increase will impact the top 7% of owner-occupied residential properties, including condominiums in the central part of Singapore and large landed properties.
The two changes to the property tax will raise some $380 million a year to Singapore’s property tax revenue.
Additional Registration Fee
A new additional registration fee (ARF) tier will be implemented for luxury cars at a rate of 220% on the portion of open market value (OMV) in excess of $80,000.
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The ARF is currently tiered at 100% of the OMV for the first $20,000, 140% for the next $30,000and 180% for those in excess of $50,000.
The new tier is expected to generate additional revenue of $50 million a year.
Photo: Samuel Isaac Chua/The Edge Singapore
