Survey reports that Singapore taxes are one of the lowest compared to other countries 241110

Singapore taxes support economic growth and that is by design. Whereas some countries use taxes merely as a way to collect revenue for government operations, Singapore has chosen to use taxes as a business incentive tool. The country has been so successful at managing its use of tax funds and attracting new business that taxes did not have to be raised during the recent economic crisis. Singapore boasts a large foreign reserves fund and its economic boom is testament to its successful management of money.

Contrast Singapore with the European Union or the United States. Around the world, countries are dealing with growing budget deficits requiring high rates of borrowing. This is forcing many countries to implement austerity measures coupled with higher taxes to bring deficits down. Because Singapore taxes have not only been kept low, but have been declining, business growth was promoted. There is no need for austerity measures in Singapore.

KPMG is a global network of audit, tax and advisory firms. The organization issued the “KPMG International’s 2010 Individual Income Tax and Social Security Rate Survey”. This survey reports that Singapore taxes are some of the lowest compared to other Asia-Pacific region countries. Both corporate and personal tax rates are low. Businesses and individuals that work for their money are able to keep more of it when taxes are low.

The taxes for Singapore corporations are less than 9% for companies with net profits under S$300,000. Any company earning more than $300,000 may be subject to a top tax rate of 17%. The top tax rate for resident individuals is 20% if they make over S$320,000 annually. Those earning income below S$320,000 are taxed at 0% up to the 20%. The low tax rates are purposely kept low to stimulate economic growth and so that people feel rewarded for their contributions to the economy. In contrast, the UK just raised its VAT tax. The European Union individual tax rate rose .4% over the last year whereas the global average was .3%.

When looking at Singapore corporate taxes, you will also find special rates to promote new startups. One of these special rates is 0% on net profits up to S$100,000 for each of the first 3 years after setup. There are also special tax rates for particular types of businesses such as clean energy that are meant to serve as incentives. With these kinds of taxes, it is no surprise that Singapore has experienced growth while other countries contracted.

The low Singapore tax rates are used to recruit new businesses to the area and to attract skilled quality workers. In fact, businesses use the tax rates to attract business leaders, executives, experienced managers and other staff. Individuals do not have to pay any taxes on estates, capital gains or dividends which makes Singapore attractive as a place to work. If you are looking for a low tax area offering excellent business growth opportunities, then Singapore is the right place.

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