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AN UNEXPECTEDLY resilient property market last year pushed the total amount of taxes collected by the Inland Revenue Authority of Singapore (Iras) from April 2009 to end-March this year to a record $29.9 billion, up 0.2 per cent from the previous year.
While this increase was essentially only about $70 million, it was a surprise, given that the global financial crisis resulted in Singapore's economy shrinking by 1.3 per cent last year.
Iras said that although measures announced in the Singapore Budget 2009, such as the 40 per cent property-tax rebates and land-tax deferral scheme, pulled property-tax collection down to $2 billion, this was compensated by the higher sale volume of residential properties and higher property prices since the second quarter of last year.
In turn, stamp-duty collection was the major tax segment which saw the biggest jump. It saw a 67 per cent rise, or about $2.4 billion, on a year-on-year basis. Specifically, the number of sales and purchase agreements soared from 128,237 to 172,434, or from a value of $990,828 to $2.06 million.
Lease agreements grew from 153,435 to 167,365, but their value dropped from $374,630 to $248,699.
However, the overall glowing picture for the property sector may not be sustained, tax analysts say. This is due to the new property rules which came into effect last Monday, which have already led many property buyers to adopt a wait-and-see approach.
"The new cooling measures could have an impact on the volume of properties being transacted.
Consequently, collections of stamp duty moving forward may see a dip relative to last year," said Mr Tay Hong Beng, executive director of KPMG Tax Services.
Meanwhile, corporate and individual income tax once again formed the bulk of tax collected at 56 per cent.
Total income tax collected came in at $16.9 billion, 2 per cent lower than the last financial year.
Poorer business performance and the 1 per cent cut in corporate tax rate to 17 per cent led tax collection from the corporate sector to fall 10 per cent from last year and ultimately stood at $9.6 billion.
"The rate cut had an effect on FY2009/10 tax collection as companies file their Estimated Chargeable Income for Year of Assessment (YA) 2010 within three months from the end of their accounting period in 2009," explained Iras.
Furthermore, Iras said that in YA 2009, there were 60,792 taxpayers who claimed course fee relief amounting to $137 million, with 42 per cent of them claiming the maximum amount of $3,500.
Conversely, Iras' individual income-tax collection rang in at a whopping $6.1 billion.
This 13 per cent increase from the previous year's $5.4 billion corresponded with the 12.5 per cent boost in employment income reported by individuals for 2008.
According to KPMG, there was $10 billion more employment income assessed and an increase of nearly 100,000 taxpaying individuals over Iras' previous financial year.
In line with the rise in wages and the recovery of the economy, the amount collected from goods and services tax (GST) also saw a rise.
GST collection picked up especially in the second half of last year, and cumulated to $6.9 billion, or 7 per cent above that in the last financial year.
"For financial year 2010/11, we may see another record year of collections from taxpayers due to the robust economy and companies doing well in general," said Mr Tay.
Taxes collected by Iras are the largest contributor to Singapore's government operating revenue (GOR).
According to the tax body, the $29.9 billion in tax collected this year would constitute about three quarters of GOR and 11.6 per cent of the country's gross domestic product.
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