The taxman collected bumper tax revenues in the last financial year as both individuals and companies earned more in a relatively healthy economy two years ago.
Total tax collected last year for financial year 2015 climbed to a new record of $44.8 billion, said the Inland Revenue Authority of Singapore's (Iras') latest annual report for the year ended March 31, released yesterday. It was 3.2 per cent higher than the $43.4 billion collected in the previous financial year.
But slowing economic growth and softening business and consumer confidence in 2014 moderated the pace of growth in income taxes, Ms Selena Ling, OCBC Bank economist, said.
Last year, income tax, which forms the bulk of Iras' collections, grew 4.4 per cent to $24.4 billion, compared with an 8.8 per cent jump in 2014. Corporate income tax collection grew 3.3 per cent to $13.8 billion last year, compared with 5.4 per cent growth in 2014. Individual income tax collection gained a modest 3.4 per cent to $9.2 billion, compared with a 16 per cent surge in 2014. Withholding tax rose to $1.4 billion.
In 2014, economic growth slowed to 2.9 per cent, below 2013's 4.4 per cent expansion, while labour productivity declined 0.8 per cent, reversing 2013's 0.3 per cent growth.
Goods and services tax collection grew a tad to $10.3 billion from $10.2 billion, Iras said. Betting revenue rose 4.9 per cent to $2.7 billion.
"One possible reason for the betting tax trend could be the 5 per cent hike in betting duty for 4D, Toto and Big Sweep to 30 per cent of gross collection," Ms Ling said.
Property tax collection edged up 2.7 per cent to $4.5 billion. But property cooling measures again hit stamp duty collection, which stayed flat at $2.8 billion on fewer property sales.
More taxpayers here joined the millionaires' club last year, with the number of those earning assessable income above $1 million rising 12.8 per cent to 5,141. Their combined assessable income came to $9.8 billion and they paid about $1.8 billion in income tax. Another 16,759 individuals had an assessed income of $500,000 to $1 million each, up from 14,757 the previous year.
However, Ms Ling noted: "The macroeconomic environment has been softening since 2014, so given that 2015 gross domestic product growth decelerated further, 2016 tax collection could be impacted."
Tax arrears stayed low at 0.62 per cent of total net tax assessed, down from 0.81 per cent previously. Iras audited and investigated some 11,450 taxpayers and recovered over $411 million in taxes and penalties last year.
Commissioner of Inland Revenue Tan Tee How said Iras "proactively reviews tax policies to ease businesses' compliance costs", in addition to administering government assistance schemes for them.
"In full year 2015, we reviewed 38 tax policies. Some of the changes made include removal of the requirements for GST-registered businesses to apportion pre-registration GST claims on certain categories of goods and services," he said.