5-9-2024 (SINGAPORE) The Lion City has witnessed a substantial surge in tax revenue, with collections soaring by 17 per cent, underscoring the nation’s robust economic performance and rising wage levels.
In a report released on 4 September, the Inland Revenue Authority of Singapore (Iras) disclosed that for the fiscal year spanning April 2023 to March 2024, tax receipts reached a staggering $80.3 billion. This figure represents a significant leap from the previous year’s £68.6 billion, marking a 17 per cent increase.
The latest tax haul accounts for a whopping 77.6 per cent of the government’s operating revenue and constitutes 11.9 per cent of Singapore’s gross domestic product, highlighting the critical role of taxation in the city-state’s financial ecosystem.
While Singapore continues to boast high levels of tax compliance, Iras remains vigilant against potential infractions. The authority conducted audits and investigations on 9,590 cases during the fiscal year, recovering approximately $857 million in taxes and penalties – a substantial increase from the $500 million recouped in the previous year.
Corporate income tax emerged as the primary contributor to the revenue surge, growing by $5.9 billion to reach $29 billion. This increase, driven by robust corporate earnings, accounted for 36.1 per cent of Iras’ total collection, up from 33.7 per cent in the preceding fiscal year.
Individual income tax also saw a notable rise, increasing by $2 billion to $17.5 billion. This uptick was attributed to higher wages and an expanding taxpayer base, representing 21.8 per cent of the total collection.
The Goods and Services Tax (GST) maintained its position as the third-largest revenue source, contributing 20.7 per cent or $16.6 billion to the coffers. This $2.6 billion increase was fuelled by heightened consumer spending and the GST rate hike from 8 per cent to 9 per cent, implemented on 1 January 2024.
Property tax and stamp duty rounded out the top five revenue sources, contributing 7.4 per cent ($5.9 billion) and 7.2 per cent ($5.8 billion) respectively. Notably, stamp duty collection experienced a slight dip of $100 million due to reduced property transaction volumes.
An Iras spokesperson emphasised the importance of these tax collections, stating, “The taxes collected are instrumental in funding essential services, fostering economic growth, enhancing our living environment, and supporting social development programmes aimed at improving the lives of Singaporeans.”
In addition to its revenue collection duties, Iras played a crucial role in disbursing grants to support businesses. The authority processed approximately $2.3 billion in grants, benefiting over 131,000 businesses through various initiatives such as the Progressive Wage Credit Scheme.
Looking ahead, Iras continues to embrace technological advancements to streamline tax processes. The authority is collaborating with solution providers to develop application programming interfaces (APIs), enabling businesses to perform tax transactions directly from their accounting and payroll software.
In a move towards greater digitisation, Iras announced plans to mandate the adoption of InvoiceNow, a system that transmits invoice data directly to the authority for tax administration. This requirement will be implemented in phases, beginning with newly incorporated companies voluntarily registering for GST from November 2025, followed by all new voluntary GST registrants from April 2026.
