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SINGAPORE: The Internal Revenue Authority of Singapore (IRAS) raised S $ 53.5 billion in tax revenue in financial year (FY) 2019/20, 2.1 percent more than the previous year.
The sum represents 72 percent of the government’s operating income and 10.5 percent of Singapore’s gross domestic product, IRAS said in its annual report released on Friday (October 16).
A breakdown of Singapore tax revenue for the 2019/20 fiscal year. (Graphic: IRAS)
Total income tax, which includes corporate income tax, personal income tax and withholding tax, accounted for more than half (57 percent) of total collection. The S $ 30.8 billion collected in FY 19/20 was 4.8% more than the total income taxes of the previous year.
The collection of the Goods and Services Tax (GST) for the 2019/20 fiscal year increased “marginally” by 0.2 percent to S $ 11.2 billion. GST accounted for 21 percent of total tax collection.
READ: Consumption taxes like GST needed to reduce the burden on workers in the aging population: Indranee
While property tax collection increased, stamp tax collection fell almost 9 percent. IRAS attributed this to a decrease in the number of real estate transactions.
“The cost of tax collection remained low to less than a cent, at 0.78 cents for every dollar collected,” IRAS said.
“The back tax rate remained low at 0.79 percent. The current year arrears for income taxes, GST and property taxes fell to S $ 357 million, from S $ 373 million in the fiscal year 2018/19 “.
SUPPORT DURING THE COVID-19 PANDEMIC
IRAS said it continues to support the Government in the administration of assistance plans: the Salary Credit Plan, the Employment Support Plan, the Government Cash Grant and the Employment Growth Incentive. Through these plans, grants totaling S $ 18 billion have been disbursed so far this year.
These grants “help businesses and Singaporeans to overcome this period of economic uncertainty caused by COVID-19,” IRAS said.
DIGITAL SERVICES
In its report, the tax authority also drew attention to an increasing use of digital services to “make taxpayers more fluid and hassle-free.”
IRAS said that for last year’s tax assessment, about 1,600 taxi drivers and private car rental drivers used a chat presentation scheme that included question-and-answer forms with “conversational language” as well as interactive chatbots.
“The conversational approach of filing by chat helps simplify the electronic filing process for less digitally inclined taxpayers … it mimics the experience of having an officer guide them through their filing,” said IRAS.
“70 percent of sampled users surveyed found filing taxes with the chatbot to be more intuitive and reported that they spent 60 percent less time filing their returns.”
IRAS also highlighted several other initiatives to simplify tax filing: an interactive property tax bill (i-Bill), touted as an “update” to the current electronic bill, as well as a simpler tax filing process for companies, as a result of an IRAS collaboration with the Corporate and Accounting Regulatory Authority and various accounting software providers.
Around 200,000 companies are expected to benefit from this initiative, IRAS said.
In the future, most notices and paper letters will be digitized by default, IRAS added. This will take place from May next year.
“IRAS is vigorously pursuing digital transformation, driven by our goals of providing taxpayers with excellent service and improving tax compliance,” said Mr. Ng Wai Choong, CEO and Commissioner of Internal Revenue.
