Parliamentary Replies
Number and Percentage of Loss-making Companies and Their Breakdown in Terms of Total Revenues and Taxes Paid by SMEs and Non-SMEs in Each of Last 10 Years
Topics
Tax-Related (Corporate Tax)
Tax-Related (Income Tax)
Tax-Related (Others)
26 July 2021
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Parliamentary Question by Mr Louis Chua Kheng Wee:
To ask the Minister for Finance (a) in each of the last 10 years, what is the total number and percentage of companies that are loss-making and their (i) total revenues (ii) loss before tax (iii) corporate income tax paid and (iv) average effective tax; and (b) what is the breakdown by SMEs and non-SMEs.
Parliamentary Reply by Minister for Finance, Mr Lawrence Wong:
Companies pay corporate income tax (CIT) based on their chargeable income, and not their accounting income. Tax adjustments are made to the accounting income to arrive at the chargeable income, on which CIT is paid. For example, there would be adjustments for non-tax deductible expenses such as depreciation, as well as for tax allowances such as capital allowance. As a result, companies with accounting losses may still pay CIT. Apart from trade income, other sources of income that are taxable such as interest, dividends and royalties, are also included in chargeable income.
Table 1 shows the requested information for all companies making accounting losses (“loss-making companies”). The information is based on companies assessed by IRAS for CIT in each Year of Assessment (YA).
Table 1: Statistics for loss-making companies
Table caption
YA | Number of companies* (a) | Number of loss-making companies (b) | % of loss-making companies (b/a) | Total revenue (S$) (in billions) | Total accounting loss before tax (S$) (in billions) | Total CIT paid (S$) (in millions) | Average Effective Tax Rate (“ETR”) (%), where ETR = CIT paid divided by chargeable income |
|---|---|---|---|---|---|---|---|
2010 | 104,160 | 36,720 | 35.3% | 272 | -67 | 398 | 0.58% |
2011 | 112,091 | 37,569 | 33.5% | 262 | -33 | 178 | 0.46% |
2012 | 117,007 | 39,149 | 33.5% | 287 | -47 | 112 | 0.43% |
2013 | 123,462 | 40,768 | 33.0% | 465 | -36 | 151 | 0.31% |
2014 | 132,012 | 44,065 | 33.4% | 444 | -41 | 265 | 0.31% |
2015 | 143,473 | 48,528 | 33.8% | 610 | -54 | 212 | 0.34% |
2016 | 149,361 | 52,132 | 34.9% | 454 | -67 | 418 | 0.29% |
2017 | 153,878 | 56,235 | 36.5% | 469 | -85 | 349 | 0.29% |
2018 | 159,170 | 59,246 | 37.2% | 505 | -79 | 302 | 0.31% |
2019 | 163,340 | 60,768 | 37.2% | 636 | -90 | 253 | 0.40% |
* This excludes companies for which revenue figures are not available.
SMEs (companies with revenue of up to S$100 million) generally comprise about 98% of all companies assessed by IRAS for CIT. In both YA 2010 and YA 2019, about 99% of all loss-making companies are SMEs, and 1% are non-SMEs.
The average ETRs for loss-making SMEs are generally lower than the average ETRs for loss-making non-SMEs. In YA 2010, the average ETR of loss-making SMEs was 0.56%, and that for loss-making non-SMEs was 3.22%. In YA 2019, the average ETR of loss-making SMEs was 0.39%, and that for loss-making non-SMEs was 2.61%.
The sustainable way to improve profitability is to help our companies to move up the value chain. We have a comprehensive suite of support measures, especially for SMEs, to improve productivity, innovate, and access bigger markets.