Tax-free Withdrawals from Supplementary Retirement Scheme (SRS) Accounts

Mr Yee Chia Hsing asked the Minister for Finance whether the Ministry can allow tax-free withdrawals from the Supplementary Retirement Scheme (SRS) accounts to the extent where the SRS contributions do not benefit from any tax deduction due to the personal income tax relief cap of $80,000 that will be effective from the Year of Assessment 2018.

All personal income tax reliefs, including Supplementary Retirement Scheme (SRS) contributions made on or after 1 January 2017, are subject to an annual cap on personal income tax relief of $80,000 from Year of Assessment 2018. This cap on personal income tax relief preserves the progressivity and fairness of our tax structure.

SRS members are advised to evaluate whether they would benefit from tax relief on their SRS contributions and make an informed decision on whether to make the contribution in the first place. Generally, those who have reached their personal income tax relief cap can place their monies in the same investments outside of SRS and can enjoy the same tax treatment on the gains from these investments. This achieves the same outcome as the Member's suggestion to allow tax-free withdrawals from SRS when the contributions do not benefit from tax relief.