Singapore to hike taxes on ultra-rich to raise revenue for post-COVID future

Singapore will increase the personal income tax rate for high-income individuals, as well as make changes to property taxes and impose a new fee on luxury cars.

These new taxes are part of Finance Minister Lawrence Wong's "significant upgrades" to Singapore's tax framework, which he outlined in his Budget 2022 statement on Friday (Feb 18).

In his speech, Wong outlined a number of short- and long-term actions to continue investing in the economy and workers while also strengthening the social contract.

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As a result, he said, tax adjustments are required to satisfy the demand for greater income to bring these projects to fruition.

Among the measures, the government plans to raise the Goods and Services Tax (GST) to 9 per cent.

The moves come as Singapore emerges from a pandemic-induced economic slump, but walks a tight rope in maintaining its attractiveness as a global financial hub while guarding against local concerns about rising wealth inequality and rising costs of living.

Singapore has been seeking to raise revenues to fund future spending that it estimates could reach more than 20% of gross domestic product (GDP) by 2030, especially as its ramps up spending on healthcare in one of the fastest ageing countries.

The government has spent about S$100 billion in the last two years to protect its people, businesses, and economy against the effects of the COVID-19 epidemic.

As part of his budget recommendations, Wong unveiled a further S$500 million ($372 million) package to boost jobs and businesses, as well as a proposal to set aside S$560 million to help Singaporeans cope with growing living costs.

(With inputs from agencies)