SINGAPORE - Tax collection fell by 7.3 per cent in the last financial year, and a total of $28.2 billion in grants was given out by the Inland Revenue Authority of Singapore (Iras) to support jobs and businesses during the Covid-19 pandemic.
Iras said on Thursday (Sept 2) that total tax collection amounted to $49.6 billion, representing 73.6 per cent of the Government's operating revenue and 10.6 per cent of Singapore's gross domestic product.
Total tax collection fell due to dampened business activities amid the pandemic in Singapore, Iras said.
Despite the impact of Covid-19, the tax arrears rate remained low, at 0.72 per cent. The arrears for income tax, goods and services tax (GST) and property tax fell to $323.8 million, from $357 million in the previous financial year.
The authority had also provided corporate and property tax rebates, extension of tax filing deadlines and deferment of income tax payments and instalment payments to ease cashflow for taxpayers affected by Covid-19.
Iras has also disbursed national grants to enterprises through the Wage Credit Scheme (WCS), Jobs Support Scheme (JSS), Government cash grants and Jobs Growth Incentive (JGI).
In the financial year 2020, it disbursed $25.7 billion JSS payouts to more than 150,000 employers and $134 million in JGI payments to over 25,000 employers.
Another JSS payout of $2.1 billion and a JGI payout of $304 million were disbursed in June.
Some $1.4 billion was also disbursed in WCS payouts to more than 90,000 employers on the qualifying wage increases given from 2017 to last year, while $969 million in Government cash grants was given to more than 116,000 qualifying property owners to provide rental relief for tenants.
Singapore has dipped into its reserves to fund various support packages amid the pandemic.
But Prime Minister Lee Hsien Loong said at the National Day Rally on Aug 29 that the Republic must now change gears to refocus on the future.
It is no longer about drawing down reserves to “keep ourselves on life support”, said PM Lee. “It is about generating new growth, jobs and prosperity for the future.”
Total income taxes - comprising corporate income tax, individual income tax and withholding tax - made up 62 per cent of Iras' collection.
Income taxes collected totalled $30.5 billion, 0.9 per cent lower than the $30.8 billion collected in the previous financial year, said Iras.
Corporate income tax collection was $16.1 billion, 3.7 per cent lower than the amount collected in the previous financial year, while individual income tax collection increased by 3 per cent to $12.8 billion.
Meanwhile, GST collection was down by 7.3 per cent to $10.3 billion.
Property tax collection was at $3.1 billion, 34.3 per cent lower than the previous financial year, while stamp duty collection fell by 7.2 per cent to $3.9 billion.
Betting taxes - comprising betting duty, casino tax and private lotteries duty - also plunged 34.3 per cent, to $1.7 billion.
Iras said the fall in collections for corporate income and property taxes was mainly due to the implementation of support measures for businesses, such as tax rebates.
GST, stamp duty and betting taxes collections were lower on account of weaker economic conditions and circuit breaker measures put in place during the year, it added.
"Taxes collected are used to support Singapore's economic and social programmes to achieve quality growth and an inclusive society," Iras said.