Update: As part of support measures in light of the COVID-19 situation, the due date for filing of personal income tax returns has been extended to 31 May 2020.
Tax season 2020 is here! If you’ve yet to file your taxes because, “still got time”, you’re not alone. But why risk it, especially when the consequences of accidentally missing the 18 Apr 2020 deadline are so not worth it?
Here’s a quick way to make sure you’ve maximised your reliefs and file your taxes – and be done for this year’s tax season.
1. Find out if you’re required to file your taxes this year
2. File your taxes or preview your Notice of Assessment (tax bill) by logging in to https://mytax.iras.gov.sg using your SingPass
3. Edit your tax return and claim the tax reliefs available to you
Your income information may have already been pre-filled in your tax return if your employer is under the Auto-Inclusion Scheme. This means that your employer submits your income information to IRAS on your behalf so you need not calculate your past year’s income all over. However, if you received additional income in 2019 or spot an error in your tax return, hit “Yes, I have other income to declare or changes to the reliefs” to ensure that these are correctly reflected.
Tax reliefs and deductions are targeted at certain groups of people to encourage social and economic objectives, such as filial piety and the advancement of skills. If you are eligible for any of the tax reliefs below, be sure to make your claims for them in your tax return to lower your tax payable.
4. Cross tax filing off your to-do list and look out for your tax bill
When you’re ready, hit Submit before logging out. An acknowledgement message will be displayed upon successful submission of your tax return, and with that, you’re all done with your tax matters! You’ll know how much your final tax payable comes up to when your tax bill arrives – by mail or digitally. Make payment for the tax bill, or sign up for GIRO to automate your tax payments across 12-month instalments.
And if you’re wondering where all that tax money go to, check out this video.
Lower your tax bill by maximising the tax reliefs available to you, and pick up some tax filing tips for a smooth tax season.
Tax season 2019 has begun, and like most Singaporeans, you may once again be required to file your taxes this year. From filing your taxes to utilising the tax reliefs at hand, here’s a quick way to a breezy tax season.
5 minutes: Find out if you are required to file your taxes this year
To file your taxes or preview your Notice of Assessment, log in to https://mytax.iras.gov.sg using your SingPass.
10 minutes: Edit your tax return and claim the tax reliefs available to you
Your income information may have already been pre-filled in your tax return if your employer is under the Auto-Inclusion Scheme. This means that your employer submits your income information to IRAS on behalf of you. However, if you received additional income in 2018 or spot an error in your tax return, hit ’Yes, I need to edit my Tax Form’ to ensure that these are reflected in your return.
Tax reliefs and deductions are targeted at certain groups of people to encourage social and economic objectives, such as filial piety and the advancement of skills. If you are eligible for any of the tax reliefs below, be sure to make your claims for them in your tax return for a lower tax bill!
When you’re ready, hit Submit before logging out. An acknowledgment message will be displayed upon successful submission of your tax return. Your tax bill will be sent to you between end Apr and Sep 2019. In the meantime, sign up for GIRO if you have yet to for a hassle-free tax payment experience.
Remember, file your taxes at myTax Portal by 18 Apr 2019 to avoid the last-minute rush and late filing penalties.
Aside from its undeniable cleanliness and thriving economy, foreign investors see Singapore as a country with an attractive corporate and personal tax rates. The Singapore taxing system is widely known for its tax relief measures, absence of capital gains tax, one-tier tax system, and extensive double tax treaties. What keeps this system going?
To answer that question, we must dive in to different types of taxes.
INDIVIDUAL INCOME TAX
As the name suggests, the individual income tax is imposed on a person following his or her total income. The extent to which a person pays for depends on one’s status in Singapore. At the time of assessment, the government may consider you as a taxpaying resident or a taxpaying non-resident. For residents, the tax rates begin at 0% and are capped at 22% (above S$320,000). For non-residents, the flat rate is 15% to 22%.
CORPORATE TAX
The corporate tax is imposed on a company following its profit or net income. Net income refers to the difference between the total expenses, receipts, and additional reductions in the book value of an asset. You have to understand that a company will only be taxed if the income is generated from Singapore or generated from overseas and received in Singapore.
What’s more? The corporate tax operates on a one-tier system and caps at 17%. By keeping corporate tax rates competitive, the country continues to attract a significant share of foreign investment.
PROPERTY TAX
It comes as no surprise that all property owners in Singapore are subject to Property Tax. It is imposed on property owners based on the expected rental values of their properties. It is levied on the unmovable properties such as buildings and lands. It is pretty much clear cut from here.
GOODS AND SERVICE TAX
Last but not the least is the type of task that we tackle on a daily basis – the Goods and Service Tax (GST). It is an indirect tax levied on the price of goods and services in the country.
GST was introduced in 1994 at a rate of 3%. Years have passed and the rate has been steady at 7%. Imported goods sold in Singapore follow the same GST rate too!
Image Credits: pixabay.com
Use these information to enrich your savvy consumer skills! ?
Anyone who takes part in trade and business is chargeable with tax. It is known that tax rates in Singapore are relatively lower compared to other countries in the world, making it more attractive for individuals and corporations to participate in some form of exchange in business.
Despite the relatively lower tax rates, no one entirely enjoys the act of filing for taxes! This is why you must employ creative ways to save on your next income tax. Consider these suggestions:
1. TAKE PART IN SUPPLEMENTARY RETIREMENT SCHEME
The Supplementary Retirement Scheme (SRS) is part of the government’s financial strategy to help Singaporeans increase their saving as they age. It is a type of retirement savings scheme that is voluntary, where anyone who has an SRS account may contribute any amount they want, which is still subject to a cap. The maximum contribution is capped at S$15,300 in 2016, a slight increase of S$2,550 from last year’s cap.
The more you save for your retirement using the SRS, the less you pay for your income tax. That being said, two apparent benefits are seen when contributing to SRS. The first being, for every dollar contributed to your account, taxable income will be reduced by a dollar. The second being, 50% of your SRS savings will not be taxed. Additionally, you are eligible to spread your withdrawals over a 10-year period.
2. HIT TWO BIRDS WITH ONE STONE
Fulfill your duty as a steward of goodwill and your duty as a responsible citizen by donating in accredited institutions. Several forms of donation are claimable. The following types of donations will qualify you for a double tax deduction (twice the amount of the donation):
a. Cash Donations
b. Shares Donations
c. Computer Donations
d. Artefact Donations
e. Public Art Tax Incentive Scheme
f. Land and Building Donations
For instance, a donation to the Singapore museums that have obtained the Approved Museum Status with the National Heritage Board is tax deductible.
If you are interested in increasing not only your retirement savings but also the retirement savings of your loved ones, you might want to consider the CPF Retirement Sum Topping-Up Scheme.
You will be entitled to a dollar-for-dollar tax relief at a maximum of S$14,000 per annum. This entails a cap of S$7,000 for the individual and another S$7,000 for the family members (T&Cs apply).
Image Credits: pixabay.com
Paying income tax can be painful to your wallet. This is why you must take advantage of the many ways to claim tax relief or rebates.
Income tax filing day are just months away and i know you hate the reminder.
Even while i’m here writing this – you would have paid for your dinner that comes with a Good and Services Tax, leaving you 17% of the cost of the meal poorer.
You may also have to pay for the property or road tax that are due.
For those that smoke and drink, thanks for the additional contribution of excise duties and tobacco tax. And for once, we are proud of you.
For the rest, i can fully understand your resentment as no one likes to fork out extra money from their own pocket for something they cannot feel or touch.
Some of you may fret because you don’t know what exactly you are paying for and what the government is going to do with the taxes collected.
Here is the breakdown for the second quarter of 2014:
(Source: Economic Survey of Singapore, 2nd quarter of 2014)
As you can see above, most of the tax revenues are spent on social development and security purposes.
Taxes are necessary for the development of an economy of a country. Without taxes, you would still be living in the kampong your parents lived in and there is no SMRT or Uber but only Rickshaw Pte Ltd.
I like to pay taxes. With them, I buy civilization. – Oliver Wendell Holmes Jr
At least in a country with the least corrupt government, you are assured that ultimately the money will come back to benefit us in other ways.
Let’s take a look at how most of the funds are spent and why you should love paying taxes:
Building the ‘Great Wall’ of Singapore
(Image credit: asiaone.com)
In tiny Singapore with limited land and resources, what we have to defend ourself is to build a strong military force to be reckoned with. Defence spending has been steady and amounts to billion of dollar each year. So the next time you grunt over your income taxes, make yourself feel better to know that the money goes into the next Leopard tanks or a Next-gen fighter jet that defends you in a place you call home.
Live as long as the Japanese
(Image credit: seniorsworldchronicle.com)
Japan has the most centenarians and that’s probably due to having one of the best healthcare system in the world. No doubt, Singapore also has one of the best quality healthcare system and Finance Minister Tharman Shanmugaratnam has said that healthcare spending will hit S$12b by 2020 in Budget 2014.
There is no such thing as free and cheap healthcare system anywhere in the world, because the public ends up paying for it, either through taxes or hefty insurance premiums.
Perhaps it’s time to substitute your Char Kway Teow and Mee Goreng with seaweed and sashimi? Stop drinking your Starbucks or Coca-Cola, drink Matcha.
Cultivate more Albert Einsteins
(Image credit: ST)
Next on the list of government expenditure is education spending. As the government spend more money building schools and training teachers, don’t you feel proud when Singaporeans are ranked the most intelligent in the world with a IQ score of 108% by British psychologist Richard Lynn and Finnish political scientist Tatu Vananen. Singapore has always top the ranks in the Trends in International Mathematics and Science Study (TIMSS) and who say we can’t produce Albert Einsteins of our own?
Singapore has spent close to $10 billion on education in 2013.
Build a Sing-kansen
(Image credit: gopixpic.com)
Late in the 19th century, Singapore’s main mode of transport to get around in by the rickshaw puller. There is no such thing as the MRT (or SBS, ERP, COE, PIE, etc). The fact that you can see modernised roads and expressways as well as MRT tracks and bus interchanges is due to the taxes you paid. Around $5 billion are spent on transport each year.
If you look at it a bit longer within the next 15 years, by 2030, the network will double and nearly 8 in 10 households will be within a 10-minute walk from an MRT station – so you just walk a short distance and you are there. – PM Lee Hsien Loong
And as Singapore gets more ambitious, besides cars and roads, we also want a Shinkansen (bullet train) of our own as you can see from the KL-Singapore High Speed Rail project which is estimated to cost RM40 billion.
Remembering Silk Road
(Image credit: worldportsource.com)
Singapore’s economy is largely dependant on trade. With no natural resources to boast about, we make use of our strategic location along key shipping routes and deepwater ports. Trade and commerce accounts for up to a quarter of our country’s GDP
Thus, it makes sense to invest the money in the area where we have advantage in. Mainly high-end manufacturing such as electronics, semi-conductors and machinery.
Assembling LEGO bricks
(Image credit: ST)
LEGO? Well, not literally. National Development forms part of the government expenditure and that’s also the reason you see more HDB flats, development of new malls and Garden by the Bay instead of kampong or shacks.
The Ministry of National Development (MND) aims to provide quality and affordable homes, good community bonding, development of green spaces and creation of identity marker through planning and management of land resources.
Act as Robin Hood
(Image credit: missedinhistory.com)
In Singapore, we use the progressive tax system where the rich get taxed more than the poor. It is viewed as a fair and equitable way since the rich spend lesser proportion of their income on necessities. If you earn higher income, you basically pay more tax. Income inequality is a social ill and leads to more crimes and social unrest.
For the lower and middle income group, there is a GST voucher given out every year since 2012 as a form of transfer payment. So for 800,000 HDB households, look forward to the GST vouchers that is coming your way this month in January 2015.
In conclusion
So everyone, a pat on your back for your contribution to Singapore throughout the years. Smile and pay your taxes due without any reproach for you have done your part in the betterment of the society. Tax is not that bad after all, isn’t it? Think positively.
