The taxman raked in record tax revenue in the last financial year as both individuals and companies earned more in a stable economy.
Total tax collected for the year to March 31 climbed to an all-time high of $43.4 billion, according to the Inland Revenue Authority of Singapore's (Iras) latest annual report out yesterday. It was 4.4 per cent higher than the $41.6 billion collected in the previous financial year.
This was in line with the economic showing as Singapore grew about 3 per cent and the global economy hummed along, said DBS Bank senior economist Irvin Seah.
Income tax, which formed the bulk of Iras' collection, rose 8.8 per cent to $23.4 billion for the year. Corporate income tax collection rose 5.4 per cent to $13.4 billion while individual income tax collection rose 16 per cent to $8.9 billion. Withholding tax came up to $1.1 billion.
As a gauge of earnings, listed companies generally grew their earnings last year, thanks to modest economic growth, easy monetary conditions and a stable financial market, said Fundsupermart research and content manager Ho Song Hui.
"The strongest earnings growth was seen in the financials sector last year... driven by the three local banks, select property-related companies and real estate investment trusts."
When it comes to individuals, Singapore is still running at full employment, so overall increases in salary costs contributed to the higher earnings of individuals, said KPMG head of tax Tay Hong Beng .
Moderate growth in private consumption spending also drove a 7.4 per cent rise in goods and services tax collection to $10.2 billion, Iras said. "Sin" taxes also boosted revenue as betting revenue rose 8.9 per cent to $2.6 billion, following the upward revision of betting duty rates from July last year.
But property cooling measures again hit stamp duty collection, which fell 29.2 per cent to $2.8 billion on fewer property sales.
More joined the millionaires' club last year, with the number of those earning assessable income above $1 million rising 7.7 per cent to 4,557. Their combined assessable income came to $8.63 billion and they paid about $1.6 billion in income tax. A further 14,757 people had an assessed income of $500,000 to $1 million each, up from 13,714 the previous year.
There could be less robust growth in tax collection this year, however, with economic growth expected to be significantly slower, owing to a medley of uncertainties - deceleration in China, slower-than-anticipated growth in the United States and a continued placid outlook for the euro zone, said DBS' Mr Seah.
"This year's company earnings performance is unlikely to be as good as last year's, and this could have a knock-on impact on personal income growth."
Tax arrears stayed low at 0.81 per cent of total net tax assessed, up a little from 0.77 per cent previously.