In the Singapore Budget 2022 statement, Minister for Finance, Lawrence Wong, talked about the importance of ensuring that we have a fair and progressive tax rate in Singapore to fund our common aspirations for tomorrow. Unsurprisingly, there are multiple changes that will be made to taxes in Singapore.
In this article, we highlight 5 ways in which taxes in Singapore will be increasing.
Note: If you want a full recap of what was announced during the Singapore Budget 2022, you can read our live coverage and commentary here.
#1 GST Will Be Increasing To 8% In 2023 And 9% In 2024
The major tax announcement that will affect all of us is of course the increase in GST. The first increase, to 8%, will take effect from 1 January 2023 onwards, before subsequently increasing to 9% with effect from 1 January 2024.
To ensure that businesses do not try to profit from this increase, a committee will be set up to prevent companies in Singapore to use GST as the reason for them to increase the prices of their products and services. An Assurance Package worth about $6.6 billion will be given to Singaporeans to cushion the impact of the GST increase.
Read Also: GST Increase: Here’s How Much The Government Will Collect – And How Much More Will You Be Paying
#2 Increase In Personal Income Tax For The Highest Income Earners In Singapore
From YA2024 onwards, the personal income tax rate for individuals in the top marginal tax bracket would increase. For those earning between $500,000 to $1,000,000, the personal income tax rate will increase from 22% to 23%.
For income in excess of $1 million, the personal income tax rate will increase from 22% to 24%.
Read Also: Complete Guide To Personal Income Tax Brackets In Singapore
#3 Increase In ARF For Luxury Cars
If you are thinking of purchasing a Ferrari or Porsche, Budget 2022 would have delivered some bad news to you. For luxury cars in Singapore, there will be an increase in the Additional Registration Fee (ARF) payable.
The ARF is a form of tax imposed on all cars in Singapore during registration. With the new ARF tax rate, cars with an Open Market Value (OMV) of more than $80,000 will face an ARF rate of 220%, up from the current 180%.
This means the ARF payable for a car with an OMV of $100,000 will now have an ARF of $160,000, up from $152,000 previously.
#4 Property Tax Rates To Increase
For those who own a non-owner-occupier property in Singapore, we should be prepared to pay high property tax for our property, with the marginal property tax rate set to increase to between 12% to 36%. The exact amount more you will need to pay will be based on the annual value of the home. Do note this applies to all non-owner-occupied property in all annual value tiers.
For owner-occupied homes with an annual value that is above $30,000, there will also be an increase in marginal property tax rates. So this means only families who stay in a private property with an annual value above $30,000 will be affected.
Read Also: Annual Value (AV) Of Your Residential Property: Here’s How Its Calculated And Why It Matters
#5 Increase In Carbon Tax
As a country that is fully committed to doing its part to transition to a net-zero world, Singapore has introduced the carbon tax. Currently, it’s at $5 per tonne.
Moving forward, however, the Carbon tax will be raised to $25 per tonne in 2024 and 2025, and $45 per tonne in 2026 and 2027, and a view to raising it to $80 by 2030. No additional carbon tax will be imposed on petrol and diesel. They are moderated via excise taxes, which will also be reviewed periodically.
Read Also: Singapore Budget 2022: Live Coverage And Real-Time Commentary
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