Remembering Lee Kuan Yew - Thank you - The nation with you in your final journey - See u in heaven
Presented to you by Property Smart Investor- A Real Estate Online Education and Discussion
Tuesday, 17 March 2015
Taxman to watch out for those who avoid paying higher taxes.
Taxman to watch out for those who avoid paying higher taxes
Mrs Josephine Teo (above), fielding Mr Gerald Giam's questions, said taxes on wealth - in particular property taxes - remain an important part of the tax system.
THE taxman will step up surveillance to detect individuals who try to avoid paying the new higher rates of personal income tax, said Senior Minister of State for Finance Josephine Teo in Parliament yesterday.
She was responding to MPs who were concerned that rich people might try to get around the higher income tax rates by setting up companies and shifting part of their wealth there.
The Government announced in last month's Budget that it would raise taxes on high income earners by up to 2 percentage points starting from 2017. The top personal tax rate will rise to 22 per cent, compared with 17 per cent for companies.
But the Inland Revenue Authority of Singapore (Iras) will closely monitor any attempt to avoid paying the higher taxes, said Mrs Teo during the debate on her ministry's budget.
It will step up its audit programmes to detect and deter tax avoidance and evasion, she said, adding: "We take the evasion of tax seriously."
Nominated MP Randolph Tan had welcomed the increase in tax rates for those in the top income bracket, but asked if there was a risk that tax receipts might come in lower than expected.
"The main risk is that our economy loses its entrepreneurial dynamism," said Mrs Teo.
"If that happens, it will be difficult to grow incomes not just for the top end but also the broad majority of our population."
Singapore's income tax regime must therefore remain competitive to reward work and encourage entrepreneurship, she added.
She also fielded questions from Non-Constituency MP Gerald Giam, who had asked how the Government tracks wealth inequality and its likely negative effects on social mobility.
In response, Mrs Teo said Singapore's system of taxes and benefits is a progressive one, where the higher-income households contribute the bulk of taxes, and the lower-income households receive the majority of benefits.
Taxes on wealth - in particular property taxes - remain an important part of the tax system, the minister added.
Mrs Teo also rejected calls, including by Ms Penny Low (Pasir Ris-Punggol GRC), to raise tax incentives for top-ups to Central Provident Fund (CPF) accounts and to grant tax incentives to more non-profit organisations.
The Government already provides tax reliefs for individuals topping up their family members' Special and Retirement Accounts, or their own Medisave accounts, said the minister.
For non-profit organisations, Mrs Teo said the Government supports them in various ways, and a forthcoming one-stop centre for social enterprises will also seek to deliver a wider range of help.
The Straits Times / Singapore Published on Tuesday, 10 March 2015