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5.10 Personal income taxes have also been coming down worldwide, although not to the same extent as corporate taxes. We have gradually lowered our personal income tax rates, most recently with a two-percentage point cut to 20%. We aim to keep personal income taxes low. This will maximise the incentives for all Singaporeans to work hard and reap the rewards of their efforts. It will also help us to attract and keep both international and Singaporean talent here.
5.11 For most taxpayers, our personal income tax regime is already competitive, because our marginal tax rate schedule is highly progressive. Thus individuals with assessable incomes of up to half a million dollars pay less tax in Singapore than in Hong Kong; in fact, up to about $530,000 of assessable income, you pay less tax in Singapore compared to Hong Kong. However, at the very top end, some other jurisdictions have lower effective tax rates than us, including Hong Kong. For attracting and keeping top talent, this is an issue. Therefore, we will continue to monitor the trends in personal income tax rates of competing locations. The changes to the framework for drawing investment income on our reserves will enable us to lower our rates further if necessary.
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