SINGAPORE - The highest earners in Singapore will soon have to pay more in personal income tax, in a move to make the Republic's individual income tax regime more progressive.
The top marginal personal income tax rate will be increased with effect from the year of assessment 2024 - which is for income earned from Jan 1, 2023, to Dec 31, 2023.
Resident taxpayers' chargeable income in excess of $500,000 up to $1 million will be taxed at 23 per cent, while income in excess of $1 million will be taxed at 24 per cent.
Resident taxpayers refer to Singapore citizens and permanent residents who reside in Singapore except for temporary absences, as well as foreigners who stay or work in Singapore for 183 days or more in the year preceding the year of assessment.
This is up from the current 22 per cent tax levied on income in excess of $320,000. Income in excess of $320,000 up to $500,000 will continue to be taxed at 22 per cent.
This increase in the top marginal personal income tax is expected to affect the top 1.2 per cent of personal income taxpayers and will raise $170 million of additional tax revenue per year.
Announcing this during his Budget speech on Friday (Feb 18), Finance Minister Lawrence Wong said: "Where personal income tax is concerned, there is room for greater progressivity, so that those who earn more, contribute more."
He outlined the importance of making significant enhancements to Singapore's tax system in this Budget, which will help to raise additional revenue and also contribute to a fairer revenue structure.
"That means everyone chips in and contributes to a vibrant economy and strengthened social compact, but those with greater means contribute a larger share," Mr Wong said.
Singapore last raised its personal income tax rate for the top income tax bracket by 2 percentage points from 20 per cent to 22 per cent, which took effect for the year of assessment 2017.
Non-residents' employment income is taxed at the flat rate of 15 per cent or the progressive resident tax rates, whichever is higher.
Read next - Budget 2022 highlights: GST hike, higher income tax for top earners and CDC vouchers for all