Last Review on Bottom-end of Marginal Resident Personal Income Tax Rates and Need to Increase Tax-free Threshold

Mr Chua Kheng Wee Louis asked the Deputy Prime Minister and Minister for Finance (a) when was the last review conducted on the bottom-end of marginal resident personal income tax rates; and (b) whether the Ministry will consider the need to increase the tax-free threshold for the first $20,000 of chargeable income to reflect inflation over time.

Under our personal income tax (PIT) regime, the first $20,000 of a tax resident individual's chargeable income is not taxed. Chargeable income refers to taxable income after netting off tax deductions and PIT reliefs.

This $20,000 threshold, together with our progressive tax rates, tax reliefs and tax rebate, results in half the workers in Singapore not needing to pay any PIT currently. Among the individuals who do pay PIT, 80% of them have an effective tax rate of less than 4%. The top 10% of our PIT-paying taxpayers pay the vast majority of PIT collected each year.

The Government has been reviewing our taxes and transfers system periodically. We will continue to do so to ensure that our PIT regime remains competitive, fiscally resilient and progressive.

To mitigate the impact of inflation on Singaporeans, especially those with greater needs, the Singapore Government has provided direct support measures, such as the recently announced one-off Cost-of-Living Special Payment and additional Community Development Council Vouchers.