The year on year results shows continuous growth, if we compare the estimate for FY-2006 to that of FY-2004 : Financial Year 2004, with the Singapore Tax Revenue estimated at $17.55 billion.
Taxman pulls in record $10b for first half
Govt coffers set to fill up with expected collection of around $20b for full year
{size=small)By Narendra Aggarwal - Economics Correspondent[/size]
THANKS to strong economic growth, the taxman raked in a record $10.4 billion in the first half of the year.
The Inland Revenue Authority of Singapore (Iras) is now expected to pull in $20 billion for the full year - in what would be another record.
And all this means the Government looks set to be in a very strong position when the next Budget comes around.
Income tax from both individuals and companies, goods and services tax (GST), property tax and stamp duty collections all posted strong double-digit growth.
Strong economic growth meant fatter pay packets, which in turn meant more income tax. Also, people with more money in their pockets spent more, so that boosted GST and other revenue.
The jump in overall tax revenue was a handsome 15.8 per cent or $1.42 billion over the first half of last year.
This came as last year's robust 6.4 per cent economic expansion spill over into this year's tax revenues - and the red-hot 9.4 per cent economic growth in the first half of this year spurred things on even faster, say economists.
And as this surge in tax revenue is projected to continue, with the amount collected by Iras set to exceed $20 billion for this year.
Economists note that the 15.8 per cent surge in the taxman's collection in the first half is more than double the 6.8 per cent increase last year over 2004's collections.
And the $1.42 billion increase in money collected as taxes in first half of this year exceeds even the $1.25 billion rise posted for all of last year over the previous year.
Looked at another way, Iras' projected $20 billion revenue this year will mean a near doubling of its collections over the past 13 years. Last year's total amounted to $19.2 billion.
Iras is the state's most important money collection agency as it contributes 65 cents of every dollar that goes into the Treasury as government operating revenue every year.
As usual, income tax was the big money spinner, with collections shooting up by $650 million from a year earlier to hit $5.79 billion.
Rising incomes are in fact a double bonanza for the taxman as people with more money in their pockets tend to spend more.
As a result of the feel-good-economic factor, GST collections shot up nearly 25 per cent in the first half, adding a cool $400 million.
This took GST revenue past the $2 billion mark at half-time.
The conomic buoyancy also resulted in a spurt in property and stock market activity, bringing further cheer to the taxman.
Stamp duty collections shot up 63 per cent, bringing in an additional $233 million to Revenue House, the Iras headquarters.
Property tax collections rose 12.6 per cent, moving past the $1 billion mark at half-time for the first time.
Duties on private lotteries rose 5 per cent, while betting duties fell 3 per cent.
Even the dead did their bit for the nation in their final act. Estate duty, though a small contributor overall, rose 50 per cent.
Estate duty, payable on the assets left behind by the dead, is currently being reviewed by the Ministry of Finance. Its updated structure is due to be unveiled in the Budget next year.
Income Tax
Jan-June 2005 : $5,139 million
Jan-June 2006 : $5,791 million
Percentage Change: +12.7%
GST
Jan-June 2005 : $1,647 million
Jan-June 2006 : $2,053 million
Percentage Change: +24.6%
Property Tax
Jan-June 2005 : $1,000 million
Jan-June 2006 : $1,125 million
Percentage Change: +12.6%
Betting Duties
Jan-June 2005 : $656 million
Jan-June 2006 : $635 million
Percentage Change: - 3.1%
Stamp Duty
Jan-June 2005 : $368 million
Jan-June 2006 : $601 million
Percentage Change: +63.3%
Private Lottery Duties
Jan-June 2005 : $136 million
Jan-June 2006 : $143 million
Percentage Change: +5.1%
Estate Duty
Jan-June 2005 : $35 million
Jan-June 2006 : $52 million
Percentage Change: +49.7%
Originally posted by Atobe:Most of the money are sucked from the rich n companies lah
[b]Extracted from the Straits Times, Monday, 14 August 2006 - Page H19 - Money section:
[color=darkred]The year on year results shows continuous growth, if we compare the estimate for FY-2006 to that of FY-2004 : Financial Year 2004, with the Singapore Tax Revenue estimated at $17.55 billion.
If every modification to imposed tax can produce a positive effect to the economy, why will the Government not review the Stamp Duty and Estate Duty so as to make life a little easier for Singaporeans ?
With so much revenue sucked up from Singaporeans, is it any wonder that Singaporeans have little left for old age, and have to consider retiring with the left over CPF monies to Old Fold's home established in lower costs neighboring countries
[/b]
Thanks for your contribution, the lack of response was probably due to the sudden upsurge of new threads that had appeared, and pushed this thread down to the bottom of the pile.Originally posted by ShutterBug:Hi Atobe,
Notice how nobody is contributing to this thread of yours?
Because I think when faced with hard cold facts like yours, those zombies don't know what to say!
When Tax Revenues becomes out of proportion to the needs of the Government, and lead to "run-away" surplusses every year, it can only mean that the money is being sucked away from "other areas".Originally posted by dakkon_blackblade:Actually it's not a problem if tax revenues are high. It's what the government gives back to the people using those tax revenues which is important. So instead of just looking at where the tax revenues come from, we should look more at where they go.
where did it go?Originally posted by dakkon_blackblade:Actually it's not a problem if tax revenues are high. It's what the government gives back to the people using those tax revenues which is important. So instead of just looking at where the tax revenues come from, we should look more at where they go.
nation buildingOriginally posted by dragg:where did it go?
With a Tax Collection System that is slowly moving towards Consumption Tax - in the form of the GST, as it matures with an ever ballooning annual collection, Income Tax should be reduced to an insignificant amount.Originally posted by BillyBong:The people concerned do not see it as an issue to ease the burden of the average singaporeans, who will spend the first 10-15 years of their married life in financial debt, slobbing day and night to pay their bills and morgage loans. The rest of their life will be spent in a futile attempt to address their retirement kitty.
I have no issue regarding the current Income tax formula but i think property prices, especially for HDB can be significantly deflated to reduce the burden of cost for residents. Transport, fuel and electricity prices are already rising rapidly, it looks like the govt is trying to create some form of controlled inflation in Singapore.
The gap between the high income and lower income group continues to widen, with no end in sight. Vagrants are beginning to fill the streets and void decks and there aren't enough govt homes to house them.
If our govt continues to pat themselves on a job well done, Singapore will soon go to the foreigners and expats, and we might become the endangered species.
Extract from the IRAS website on the topic of Estate Duty :-
For cases where the deceased died domiciled in Singapore
Estate Duty is payable on the aggregate market value of all Singapore assets (both immovable and moveable) and movable assets outside Singapore of a deceased person at the date of death. His land and buildings (immovable property) outside Singapore are not liable to duty.
Moveable assets include deceasedÂ’s cash, bank accounts, insurance monies, shares, CPF balance, motor vehicles, credit balance with Comptroller of Income Tax etc.
Under the Estate Duty Act, the following gifts made by the deceased during his lifetime are liable to estate duty:
A gift made five years before his death
A gift, whenever made, is liable to estate duty if the donee (person to whom the gift was made) did not possess and enjoy the gift immediately to the entire exclusion of the donor
A gift for public or charitable purposes made twelve months before his death
Exceptions:
The following gifts made by the deceased during his lifetime are not subject to estate duty on his death:
A gift made on or after 1st January 1999 to the Singapore Government or Institution of Public Character (IPC)
A gift of money or other gift (approved by the Minister) made on or after 1st April 1987 to an approved Museum
For cases where the deceased died domiciled outside Singapore
For a deceased person dying before 1 January 2002, estate duty is payable on the aggregate market value of all his Singapore assets, immovable and movable as at the date of death.
For a deceased person dying on or after 1 January 2002, no estate duty is payable on his movable property in Singapore. Only his immovable property in Singapore is liable to estate duty.
Estate Duty Calculation
When a person dies, all his assets form his estate, and tax is payable ( "estate duty" ) if the total sum exceed certain value.
Estate Duty is payable on the aggregate value of all Singapore property (movable and immovable) and movable property outside Singapore. For land and houses outside Singapore, estate duty is not payable to the Singapore Government. Whether there is any other form of tax by the government of the country in which the land or house is located depends on the previaling law in that country.
Most Singaporeans however do not need to pay estate duty. as there are exemptions for residential properties not in excess of 9 million Singapore Dollars, and for other movable assets not in excess of S$600,000/- including monies in the Central Provident Fund account.
Deceased died domiciled outside Singapore
Estate duty is payable on the aggregate market value of all a person's Singapore property, immovable and movable as at the date of death for a deceased person dying before 1 January 2002.
Estate duty is not payable on the movable property and only on his immovable property as at the date of death for a deceased person dying after 1 January 2002.
Estate duty exemption (For a person dying on or after 28 February 1996)
Dwelling house up to the value of S$9 million
All other properties (including CPF) up to the value of S$600,000
Interest on estate duty.
If estate duty is payable and not paid, there is interest payable to the tax department.
Has it not been the Government's plan - not to create dis-incentive to those who are industrious, and has designed programs to reward those in the upper income bracket for their productivity and contribution to Singapore's wealth creation.Originally posted by TooFree:IÂ’m afraid the Estate Duty can be an effective stopgap economic measure to narrow the rich-poor wealth divide which has been fearfully drifting further apart in recent years. Though within the meritocracy framework, society must always progress as one nation, one people. It can get pretty nasty if the gap continue to widen with the outcome a likelihood of social unrest.
It is perhaps more critical to examine on whether the Estate Duty can at least suppress for a certain period of time the inevitable rise in other consumers' taxes in time to come which greatly affect the majority more than the Estate Duty on the handful filthy rich. Called it ‘legally robbing the rich to aid the poor’ but if the well-to-do are not contributing more in the monetary aspect to enhance the society well-being and equality, then their selfishness can result in fatality mass discontentment.![]()
You are right in that the Government do not - "discredit the talented and enterprising individuals to accumulate wealth but a mutual understanding that outstanding individuals who had accumulated surpluses of wealth should contribute more to the community".Originally posted by TooFree:I certainly do not see that the govenment meant to discredit the talented and enterprising individuals to accumulate wealth but a mutual understanding that outstanding individuals who had accumulated surpluses of wealth should contribute more to the community. The government can provide ample opportunities, programs and funds to aid promising individuals to excel in life but the common consensus is that the particular individual does not milk the system for sole benefit but to contribute a small part in return to the society upon death.
How about self-made millionaire?
One can note that.
'A young tree cannot grow on its own even if it does has strong will. The sunlight provides warmth, air for photosynthesies, fertile soil for nourishment, water to sustain life. It is a combination of variable factors that nurture the growth of a young tree into a strong tree.'
No government at the end of the day, is able to conduct proper works with a fiscal deficit. The Estate Duty system cannot be flaw when the majority do not feel the pinch other than the richer counterpart. However, I have to agree on the growth of affluent middle-income Singaporeans in recent years, and perhaps it is time to review on rising the bracket of the Estate Duty rather than complete abolishment of it at the present day.![]()