Equality

The rich will pay more Personal Income Tax, Property Tax & Additional Registration Fee: Budget 2022

Besides highlighting how Singaporeans will benefit from Budget 2022 and delaying the Good and Services Tax (GST), Finance Minister Lawrence Wong also introduced significant changes that will ensure Singapore will have a fairer and more resilient tax system.

He delivered the 2022 Budget statement in Parliament today (Feb 18).

Here are some of the tax changes that will be levied on the rich.

Top earners to pay more Personal Income Tax

“Where Personal Income Tax is concerned, there is room for greater progressivity. So that those who earn more, contribute more,” said Minister Wong.

Thus, chargeable income in excess of S$500,000 to S$1 million will be taxed at 23 per cent and chargeable income in excess of S$1 million will be taxed at 24 per cent – an increase from the current 22 per cent on chargeable income in excess of S$320,000.

This will take effect from the year of assessment of 2024. The increase will affect the top 1.2 per cent of income tax payers and will raise S$170 million.

High-end properties to pay more Property Tax

The increase in marginal tax rates will be revised in two steps starting 2023.

  • Non-owner-occupied residential properties: 11 to 27 per cent (up from 10 per cent to 20 per cent currently) in 2023
  • Non-owner-occupied residential properties: 12 per cent to 36 per cent (up from 10 per cent to 20 per cent currently) in 2024
  • Owner-occupied residential properties for the portion of annual value in excess of $30,000:  5 to 23 per cent (up from 4 per cent to 16 per cent currently)
  • Owner-occupied residential properties for the portion of annual value in excess of $30,000: 6 per cent to 32 per cent (up from 4 per cent to 16 per cent currently)

The new property tax rates will raise S$380 million.

Luxurious cars to pay more Additional Registration Fee (ARF)

An additional ARF tier of 220 per cent will be introduced for cars at a rate of 220 per cent for the portion of Open Market Value in excess of $80,000.

This will generate an additional S$50 million in revenue per year, said Minister Wong.

A fairer and resilient tax system

In Singapore, the primary ways to tax wealth are through Property Tax and ARF.

“This (wealth taxes) is an important part of the tax system. Apart from generating revenue, they also help to recirculate a portion of the wealth stock into our economy and in so doing, mitigate social inequalities,” said Minister Wong.

“Wealth taxes are therefore needed to build a fairer society where everyone can aspire to succeed, regardless of their backgrounds.”

Indeed, the new tax measures will ensure a fairer and resilient tax system in Singapore.

Cover photo credit: MCI