<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published August 27, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Million-dollar tax returns fatten coffers
More make it to million-dollar club in YA2008, but leaner times lie ahead
By TEH SHI NING
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(SINGAPORE) Singapore's million-dollar club continued to grow, as did these top earners' average tax bill.
<TABLE border=0 cellSpacing=0 cellPadding=5 align=left><TBODY><TR><TD bgColor=#ffffff>[FONT=Geneva, Helvetica, Verdana, Arial, sans-serif]<!-- REPLACE EVERYTHING IN CAPITALS WITH YOUR OWN VALUES --><TABLE class=quoteBox border=0 cellSpacing=0 cellPadding=0 width=144 align=left><TBODY><TR><TD vAlign=bottom>
</TD></TR><TR><TD bgColor=#fffff1><TABLE border=0 cellSpacing=0 cellPadding=0 width=124 align=center><TBODY><TR><TD vAlign=top>'One of the trends we can expect with the downturn is an increase in non-compliance of tax obligations.'
</TD></TR><TR><TD vAlign=top>
</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>A total of 3,838 taxpayers earned above a million dollars in the year of assessment 2008, which assesses income earned in 2007. This was a 40 per cent surge from 2,751 top earners in the previous year.
The Inland Revenue Authority of Singapore's (IRAS) annual report, released yesterday, showed that these top earners earned $8.24 billion in total - about $2.15 million on average - and paid a total of about $1.39 billion in income tax for the year.
This works out to a tax bill of about $361,000 per millionaire, up from the previous year's average of $327,200.
As an indication of Singapore's tax profile, the IRAS data also showed that these million-dollar earners, who made up just 0.4 per cent of the total number of taxpayers in YA2008, accounted for about 25 per cent of the total personal income tax assessed.
Commissioner of Inland Revenue Moses Lee said in the annual report: 'As Singapore's income tax collection is on a preceding year's basis, it was relatively unaffected by the financial meltdown which took place towards the end of 2008.'
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</TD></TR></TBODY></TABLE>Indeed, overall tax revenue collected rose 2.4 per cent to $29.8 billion, from $29.1 billion in the previous financial year, with increased takings in most types of tax.
'However, tax revenue is expected to fall sharply in FY2009/10, as the severe economic slowdown impacts income and consumption,' Mr Lee said.
For FY2008/09, which runs from April 2008 to March 2009, income tax collection, which includes corporate income tax, individual income tax and withholding tax, still rose 14.9 per cent from the previous financial year, to $17.2 billion.
Income tax makes up 57 per cent of overall tax collected, and is based on the income of businesses and individuals from the previous year.
GDP grew a robust 7.7 per cent in 2007, which made up the bulk of the year in which incomes taxed were made.
Hence, with individuals enjoying higher earnings, personal income tax collection rose 19.4 per cent to $5.4 billion. The overall number of taxpayers for the year assessed rose to 960,815 from 856,833 the previous year.
Corporate income tax rose 14.3 per cent to $10.6 billion, as the favourable economic climate of 2007 and early 2008 meant that companies were reporting better corporate profits.
Given that the economy's growth slowed to 1.1 per cent in 2008, and is expected to contract in 2009, corporate tax income collection is expected to shrink in the next one to two financial years, IRAS said.
Gan Kwee Lian, executive director of tax services at KPMG in Singapore, noted the same, saying that she expects the most significant impact of the financial crisis on tax collections to be only seen in the FY2010/11 annual report.
Ms Gan noted, too, that the reduction in corporate tax, from 18 per cent to 17 per cent, would accentuate the dip in tax collections then.
While overall tax takings have not taken any significant blow from the financial crisis due to the timing of tax assessment, Koh Soo How, tax partner at PricewaterhouseCoopers, pointed out that one area visibly hit by the crisis was stamp duty collection, which plunged 61.1 per cent from the previous financial year, to $1.4 billion.
Mr Koh said that the fall in the number of property transactions, especially in the later half of 2008, likely contributed to this, noting that stamp duty is collected within 14 days of a sale. The decline in property prices would has resulted in low stamp duty collection from the sale and purchase agreements too.
IRAS said that the goods and services tax (GST) collection would also better reflect the recession than income tax collection, as it tends to move in tandem with economic conditions. Total GST collected in FY2008/09 rose 5.2 per cent to $6.5 billion from the previous year.
In FY2008, IRAS spent 0.8 cent to collect each dollar of tax, an increase over last year's 0.77 cent per dollar collected, but lower than the three-year average cost of 0.84 cent per dollar collected.
Total cumulative tax arrears fell 14 per cent to $766.9 million, but Mr Koh pointed out that there was in fact a close to 10 per cent rise in GST arrears.
'One of the trends we can expect with the downturn, is an increase in non-compliance of tax-obligations. And already, we can see that there has been a significant rise in penalties arising from audit, particularly for GST,' he said.
IRAS audited and investigated a total of 7,919 cases, recovering $199 million in taxes and penalties. This was higher than the $154 million in penalties recovered last year.
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Million-dollar tax returns fatten coffers
More make it to million-dollar club in YA2008, but leaner times lie ahead
By TEH SHI NING
<TABLE class=storyLinks border=0 cellSpacing=4 cellPadding=1 width=136 align=right><TBODY><TR class=font10><TD width=20 align=right>
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) Singapore's million-dollar club continued to grow, as did these top earners' average tax bill.
<TABLE border=0 cellSpacing=0 cellPadding=5 align=left><TBODY><TR><TD bgColor=#ffffff>[FONT=Geneva, Helvetica, Verdana, Arial, sans-serif]<!-- REPLACE EVERYTHING IN CAPITALS WITH YOUR OWN VALUES --><TABLE class=quoteBox border=0 cellSpacing=0 cellPadding=0 width=144 align=left><TBODY><TR><TD vAlign=bottom>
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- Koh Soo How,
</TD></TR><TR><TD vAlign=top>PwC
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The Inland Revenue Authority of Singapore's (IRAS) annual report, released yesterday, showed that these top earners earned $8.24 billion in total - about $2.15 million on average - and paid a total of about $1.39 billion in income tax for the year.
This works out to a tax bill of about $361,000 per millionaire, up from the previous year's average of $327,200.
As an indication of Singapore's tax profile, the IRAS data also showed that these million-dollar earners, who made up just 0.4 per cent of the total number of taxpayers in YA2008, accounted for about 25 per cent of the total personal income tax assessed.
Commissioner of Inland Revenue Moses Lee said in the annual report: 'As Singapore's income tax collection is on a preceding year's basis, it was relatively unaffected by the financial meltdown which took place towards the end of 2008.'
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'However, tax revenue is expected to fall sharply in FY2009/10, as the severe economic slowdown impacts income and consumption,' Mr Lee said.
For FY2008/09, which runs from April 2008 to March 2009, income tax collection, which includes corporate income tax, individual income tax and withholding tax, still rose 14.9 per cent from the previous financial year, to $17.2 billion.
Income tax makes up 57 per cent of overall tax collected, and is based on the income of businesses and individuals from the previous year.
GDP grew a robust 7.7 per cent in 2007, which made up the bulk of the year in which incomes taxed were made.
Hence, with individuals enjoying higher earnings, personal income tax collection rose 19.4 per cent to $5.4 billion. The overall number of taxpayers for the year assessed rose to 960,815 from 856,833 the previous year.
Corporate income tax rose 14.3 per cent to $10.6 billion, as the favourable economic climate of 2007 and early 2008 meant that companies were reporting better corporate profits.
Given that the economy's growth slowed to 1.1 per cent in 2008, and is expected to contract in 2009, corporate tax income collection is expected to shrink in the next one to two financial years, IRAS said.
Gan Kwee Lian, executive director of tax services at KPMG in Singapore, noted the same, saying that she expects the most significant impact of the financial crisis on tax collections to be only seen in the FY2010/11 annual report.
Ms Gan noted, too, that the reduction in corporate tax, from 18 per cent to 17 per cent, would accentuate the dip in tax collections then.
While overall tax takings have not taken any significant blow from the financial crisis due to the timing of tax assessment, Koh Soo How, tax partner at PricewaterhouseCoopers, pointed out that one area visibly hit by the crisis was stamp duty collection, which plunged 61.1 per cent from the previous financial year, to $1.4 billion.
Mr Koh said that the fall in the number of property transactions, especially in the later half of 2008, likely contributed to this, noting that stamp duty is collected within 14 days of a sale. The decline in property prices would has resulted in low stamp duty collection from the sale and purchase agreements too.
IRAS said that the goods and services tax (GST) collection would also better reflect the recession than income tax collection, as it tends to move in tandem with economic conditions. Total GST collected in FY2008/09 rose 5.2 per cent to $6.5 billion from the previous year.
In FY2008, IRAS spent 0.8 cent to collect each dollar of tax, an increase over last year's 0.77 cent per dollar collected, but lower than the three-year average cost of 0.84 cent per dollar collected.
Total cumulative tax arrears fell 14 per cent to $766.9 million, but Mr Koh pointed out that there was in fact a close to 10 per cent rise in GST arrears.
'One of the trends we can expect with the downturn, is an increase in non-compliance of tax-obligations. And already, we can see that there has been a significant rise in penalties arising from audit, particularly for GST,' he said.
IRAS audited and investigated a total of 7,919 cases, recovering $199 million in taxes and penalties. This was higher than the $154 million in penalties recovered last year.
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