Minimum Income Level for Taxation

Mr Leon Perera asked the Deputy Prime Minister and Minister for Finance (a) how frequently does the Government consider revisions to the minimum individual income level for taxation, which was last revised in 2001; and (b) whether the Government will consider raising the minimum individual income level for taxation in light of inflation.

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

This $20,000 threshold, together with our progressive tax rates, tax reliefs, and tax rebate, ensures that low- and middle-income earners pay no or low income taxes. Currently, about half of our workers do not pay personal income tax. Among the individuals who do pay personal income tax, 80% of them have an effective tax rate of less than 4%.

The Government reviews our tax system periodically, and will continue to do so to ensure that our personal income tax regime remains competitive, fiscally resilient and progressive.