The Inland Revenue Authority of Singapore (IRAS) collected a total of S$80.3 billion in tax revenue for the 2023/24 financial year (FY), marking a 17 per cent increase from the previous year. This surge is attributed to robust economic growth and nominal wage increases in Singapore during 2022. The total revenue collected represents approximately 77.6 per cent of the Singapore government’s operating revenue and 11.9 per cent of the nation’s gross domestic product.
Background
The significant rise in tax revenue underscores the resilience of Singapore’s economy post-pandemic. The IRAS’s collection efforts reflect the broader economic trends, including increased corporate earnings and consumer spending. This financial year’s collection is a testament to the country’s economic policies and the effectiveness of its tax system.
Breakdown of tax revenue collected
Corporate income tax
Corporate income tax (CIT) was the largest contributor to IRAS’s revenue, amounting to S$29 billion, which is 36.1 per cent of the total revenue collected. This figure represents a 25.6 per cent increase from the previous year’s S$23.1 billion, driven by strong corporate earnings.
Individual income tax
Individual income tax (IIT) accounted for 21.8 per cent of the total revenue, amounting to S$17.5 billion. This was an increase of S$2 billion from the previous year, attributed to higher wages and an increase in the number of taxpayers.
GST
The Goods & Services Tax (GST) contributed 20.7 per cent of the total revenue, amounting to S$16.6 billion. This marked an increase of S$2.6 billion, driven by higher consumer spending and the GST rate increase from 8 per cent to 9 per cent on January 1, 2024.
Property tax and stamp duty
Property tax accounted for 7.4 per cent, or S$5.9 billion, of the revenue collection. Stamp duty, which saw a slight decline of S$0.1 billion due to lower property transaction volumes, accounted for 7.2 per cent, or S$5.8 billion, of the revenue.
About S$2.3 billion processed in grants to help workers and businesses
The IRAS also processed approximately S$2.3 billion in disbursements to over 131,000 businesses, supporting workers and jobs through various schemes. The Progressive Wage Credit Scheme (PWCS) saw S$1.67 billion disbursed to over 81,000 employers, providing transitional wage support with higher government co-funding for lower-wage workers. Additionally, S$311 million was disbursed under the Senior Employment Credit (SEC) to over 82,000 employers, aiding them in adjusting to cost increases from higher retirement and re-employment ages. The Jobs Growth Incentive (JGI) scheme saw S$177 million disbursed to support over 21,000 businesses with local hiring.
S$857 million recovered from taxpayers who refused to comply
Despite high tax compliance in Singapore, the IRAS took action against a “small minority” of non-compliant taxpayers. In FY2023/24, IRAS audited and investigated 9,590 cases, recovering about S$857 million in taxes and penalties. These funds are crucial for funding essential services, growing the economy, enhancing the living environment, and supporting social development programmes to improve the lives of Singaporeans.
Future implications
The increased tax revenue and effective compliance measures highlight the strength of Singapore’s fiscal policies. Moving forward, the government is likely to continue leveraging these funds to support economic growth and social development. The ongoing adjustments in tax policies, such as the GST rate increase, indicate a proactive approach to maintaining fiscal health and addressing future economic challenges.
