The Inland Revenue Authority of Singapore, the largest tax revenue collector, is responsible for the assessment, collection and enforcement of taxes, duties and levies under the various revenue Acts. Tax structure in Singapore broadly aims at maximizing revenue for the country and to use the expenditure in areas which yield lasting returns. e.g. education, healthcare, infrastructure, housing and programmes to protect the environment
The various taxes imposed by the government are:
- Income Tax: Income tax is charged on income of individuals and companies.
- Property Tax: Property tax is imposed on owners of properties based on the expected rental values of the properties.
- Estate Duty: Estate duty is levied on the value of a deceased's net assets in excess of a threshold amount.
- Motor Vehicle Taxes: These are taxes, other than import duties, that are imposed on motor vehicles. These taxes are imposed to curb car ownership and road congestion.
- Customs and Excise Duties: Singapore is a free port and has relatively few excise and import duties. Excise duties are imposed principally on tobacco, petroleum products and liquors. Also, very few products are subjected to import duties. The duties are mainly on motor vehicles, tobacco, liquor and petroleum products.
- Goods and Services Tax: GST is a tax on consumption. The tax is paid when there is an expenditure on goods or services, including imports.
- Betting Taxes: These are duties on private lottery, betting & sweepstake.
- Stamp Duties: This is imposed on commercial and legal documents relating to stock & shares and immovable property.
- Others: The two main taxes are the foreign worker levy and the airport passenger service charge. The foreign worker levy is imposed to regulate the employment of foreign workers in Singapore.
The main goal of tax policy in Singapore is:
- Revenue Raising: This is the traditional aim of tax policy. Tax revenue is a substantial source of funding for government operations.
- Promotion of Economic and Social Goals: Tax has been used to influence behavior towards desirable social and economic goals. For e.g. to encourage mechanization and automation, the government allows accelerated capital allowance for most assets used for business purposes.