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Singapore Budget Commentary 2022

Written by Tricor Group | Mar 24, 2022

The Minister for Finance, Mr Lawrence Wong, delivered the Singapore Budget Speech on February 18, 2022. While key bets had been placed for the date of increase of the Goods and Services Tax (GST) rate from 7% to 9%, very few punters had anticipated a stepped increase over two years.

This was a masterstroke by the government to address inflationary concerns and at the same time, stay committed to its timeline to increase the GST.

Other significant announcements are the plans to introduce a Minimum Effective Tax Rate (METR) Regime in response to Singapore’s endorsement of the G20 Tax Reform of a global minimum tax rate of 15%. In addition, the Government has tapped on the existing tax systems in place to ensure that the taxes paid by individuals in Singapore are more progressive. Apart from increasing the top marginal personal income tax rates, the government will also be imposing additional property tax and Additional Registration Fees on owners of more expensive properties and vehicles.

TAX CHANGES

  1. Corporate Income Tax
    1. Minimum Effective Tax Rate Regime
    2. Rationalizing Tax Exemptions or Incentives Schemes
    3. Extension of Tax Exemptions or Incentives Schemes that are Due to Lapse
    4. Tax Reporting for Insurers
  2. Tax on Wealth
    1. 2.1 Personal Income Tax
    2. Property Tax
    3. Additional Registration Fee for Vehicles
  3. Other Income Tax Changes
    1. Withholding Tax Exemption for Non-resident Mediators and Arbitrators
  4. Goods and Services Tax
    1. Increase in Goods and Services Tax Rate
    2. GST Treatment for Travel Arranging Services
NON-TAX CHANGES FOR BUSINESSES
  1. Enterprise Disbursements
    1. Progressive Wage Credit Scheme
    2. Small Business Recovery Grant
    3. Jobs Growth Incentive
  2. Adjustments to Foreign Worker Policies
    1. Minimum Qualifying Salary for Employment Pass and S Pass
    2. Changes to Foreign Worker Levy Rates and Dependency Ratio Ceiling
NON-BUDGET TAX UPDATES
  1. Tax Implications of the Global Interbank Offer Rate Reform
  2. Tax Governance and Tax Risk Management
    1. Tax Risk Management and Control Framework for Corporate Income Tax
    2. Tax Governance Framework (TGF)
  3. New e-Tax Guides Issued
    1. Transfer Pricing Guidelines Special Topic – Centralized Activities in Multinational Enterprise Groups
    2. GST: Taxing imported low-value goods by way of the overseas vendor registration regime (First Edition)
    3. GST: Taxing imported low-value goods by way of the overseas vendor registration regime (First Edition)
KEY TAX OBLIGATIONS AND DEADLINES

Contact Our Expert Team

Tan Eng Hock
Senior Tax Manager, Tricor Singapore
Email: eng.hock.tan@sg.tricorglobal.com
Tel: (65) 6236 3489

Tuan Leng Poh
Senior Tax Manager, Tricor Singapore
Email:
 tuan.leng.poh@sg.tricorglobal.com
Tel: (65) 6325 5251