Tax revenue up 22.4% as economy rebounded following eased COVID-19 restrictions: IRAS
Stamp duty accounted for the largest share in the jump in tax revenue collection due to the buoyant property market where there was an increase in transactions.
SINGAPORE: A total of S$60.7 billion in tax revenue was collected in the 2021/22 financial year, a 22.4 per cent jump from the previous year as the economy rebounded after COVID-19 restrictions were eased.
The increase came on the back of a lower base in FY2020/21 due to the pandemic, when tax revenue fell by 7.3 per cent, the Inland Revenue Authority of Singapore (IRAS) said in a news release on Thursday (Aug 11).
Singapore eased many of its COVID-19 restrictions from Apr 26, in what the Health Ministry said is a milestone in its progress towards living with the coronavirus.
Tax revenue collection, which is used to support Singapore’s economic and social programmes, grew by an average of 4.8 per cent on a compounded annual basis over a five-year period, said IRAS, which released its annual report on Thursday.
The collection represents 73.6 per cent of the government operating revenue and 11.4 per cent of Singapore’s gross domestic product.
The recovery in the latest revenue collection was seen across all tax types.
The arrears rate for income tax, goods and services tax (GST) and property tax fell to 0.64 per cent at S$332.8 million, compared to the 0.72 per cent in the previous year.
Corporate income tax, at S$18.2 billion, made up 30 per cent of IRAS’ collection. It went up by S$2.1 billion and accounted for the largest share.
This is followed by individual income tax which rose by S$1.4 billion to S$14.2 billion. About 80 per cent came from taxpayers with annual income above S$150,000.
Goods and Services Tax collection was S$12.6 billion, while stamp duty collection came in at S$6.8 billion.
Of the increase of S$11.1 billion in tax collection from FY2020/2021 to 2021/2022, stamp duty accounted for the largest share. IRAS said this was down to the buoyant property market and a rise in property transactions.
"The increase in corporate income tax and individual income tax reflected stronger earnings as well as the deferment of tax payments in FY2020/21 to help businesses cope with the impact of COVID-19," said IRAS.
The statutory board also said it continued to provide grants to support businesses, jobs and wage growth, with a total of S$8.2 billion disbursed under various schemes.
The number of taxpayers requiring assisted services was “significantly reduced” after digital services for self-help transactions were enhanced, said IRAS.
Taxpayer contacts decreased by 22.7 per cent to 1.4 million, while self-help transactions increased by 8 per cent to 38.9 million.
The statutory board also said it is exploring ways to improve taxpayers’ audit experience through greater transparency of its audit process.
As part of efforts against errant taxpayers, it audited and investigated 8,665 cases and recovered S$385 million in taxes and penalties in FY2021/2022.