Singapore is reportedly increasing taxes aimed at the city-state’s richest residents with levies on some incomes, property and cars, according to our sister publication, International Adviser.
This move is expected to eventually raise a combined S$600m ($447m) a year.
Increased personal income taxes for those earning more than S$500,000 a year will raise an additional S$170m, while new property taxes will net an extra S$380m and car levies will give the government another S$50m a year.
Lawrence Wong, Singapore finance minister, told parliament on 18 February 2022 that higher taxes on wealth generate revenue and “help to circulate a portion of the wealth stock back into our economy and in so doing help mitigate social inequalities”.
He added: “Wealth taxes are therefore needed to help build a fairer society where everyone can aspire to succeed regardless of their backgrounds.”
According to Bloomberg, residents with annual income of over S$320,000 currently pay 22% in tax.
From 2024 onwards, incomes between S$500,000 to S$1m will be taxed at 23% while those above S$1m a year will pay 24% in a move expected to affect the top 1.2% of personal taxpayers and raise S$170m.
Singapore, already one of the world’s most expensive places to drive a car, will further increase that cost. A new tier of tax on vehicles with a market value above S$80,000 is expected to raise S$50m in revenue a year.
But the bulk of the funds will come from taxing high-end properties. For owner-occupied residential properties, the tax for the portion of annual value in excess of S$30,000 will be increased to between 6% and 32% — from the current range of 4% to 16%.
For non-owner-occupied residential properties, the current tax rates of 10% and 20% will be increased to 12% to 36%.
Wong added: “Ideally we would want to tax the net wealth of individuals but such a tax is not easy to implement effectively.
“Many forms of wealth are mobile and as long as there are differences in wealth taxes across jurisdictions, such wealth can and will move.”