The Inland Revenue Authority of Singapore (IRAS), in its annual report, said that, despite a 2% contraction in the country’s economy in 2009, a buoyant property market sustained tax revenues which, at a total of SGD29.9bn (USD22.25bn) in 2009/10, were 0.2% higher than in the previous fiscal year.
Taxes collected by IRAS are the largest contributor to the government’s operating revenue (GOR). For the fiscal year to end-March 2010, IRAS’s collections were 75.5% of GOR and 11.6% of Singapore’s gross domestic product.
56% of total tax collected by IRAS came from income tax, which consists of corporate income, individual income and withholding taxes. In 2009/10, income tax collected was SGD16.9bn, 2% lower than in the previous financial year. However, while corporate income tax was 10% lower compared to the last fiscal year due to poorer corporate performance in 2009, individual income tax collected was 13% higher, mainly because of a 12.5% increase in income reported for 2008.
Goods and services tax (GST) revenues picked up in the second half of 2009/10 in tandem with the recovery of the economy, and, for the fiscal year as a whole, GST collection was SGD6.9bn, or 7% higher compared with the previous fiscal year.
It was said that the Singapore property market made a strong recovery in 2009. The higher sale volume of residential properties, coupled with higher property prices since the second quarter of 2009, contributed to the increase in stamp duty collection which, at SGD2.4bn, saw a 67% increase over the previous fiscal year.
IRAS confirmed that it has continued to work with other economic agencies to support the economic recovery by sustaining its effort in reviewing tax rules to ease businesses’ compliance costs. Last year, it reviewed 37 tax policies, including simplifying the accounting of GST so that businesses no longer need to track the date of delivery of goods or performance of services, expanding the zero-rating of GST for the marine industry and enhancing the stamp duty relief rules on business restructuring.
There was also no let-up in IRAS’s compliance efforts in 2009/10. It continued to focus on sectors that posed higher compliance risk, such as the motor industry and electronics wholesale, together with specific professions like public accountants, for routine assessment for compliance. Deterrence efforts were maximised by prosecuting and publicising tax evasion cases.