Tải bản đầy đủ - 0trang
II. Prominent features of Singaporean public finance policy
FY2016 Operating Revenue was S$68.7 billion. The chart was mainly occupied by several
sectors which are Corporate Income Tax, Personal Income Tax, Good and Services Tax and
collected revenue relevant to possession of vehicle.
The Total Corporate Income Tax in 2016 was S$13.45 billion, made up 19.6% of total
revenue. The Personal Income Tax, Good and Services Tax and Revenue from owning
Vehicle were S$10.48 billion (15.3%), S$10.85 billion (15.8%) and S$9.17 billion (13.3%)
II.1.1 Corporate and Personal Income Tax
With a low headline corporate tax rate of 17%, generous tax exemptions for small-tomidsize companies, and industry-specific tax incentives, Singapore is well positioned to
maintain its economic competitiveness in today’s global environment. The Government of
Singapore provides a comprehensive package of tax concessions and incentives to businesses
whose business activities reflect the direction in which the state plans to steer economic
Table 2. Tax Rate in YA
Source: Inland Revenue Authority of Singapore3
Singapore is considered a tax haven because of its low personal and corporate tax rates
and other incentives for foreign investors. It levies 22% on personal incomes in the highest
tax range, defined as incomes above 320,000 Singapore dollars, and does not tax capital
gains. The city-state attracts international investment because of its strategic location as a
gateway for companies planning to expand into emerging Asian economies. The Inland
Revenue Authority of Singapore (IRAS), a legal board of the Ministry of Finance, is
responsible for collecting taxes.
Source: Inland Revenue Authority of Singapore4
Corporate Tax Rates
The corporate income tax rate in Singapore is 17%. However, the effective corporate tax
rate could be lowered by other IRAS incentives. The Productivity and Innovation Credit
(PIC) Scheme, for example, allows companies a complete corporate tax exemption if they
earn 28 million Singapore dollars per year. Start-up companies in Singapore can also take
advantage of the zero tax exemption on their first $100,000 of income for the first three
consecutive years of business. To qualify for the startup tax exemption, companies must be
incorporated in Singapore and have a maximum of 20 shareholders. One of the startup
shareholders must be an individual shareholder and hold a minimum of 10% of shares. After
the startup period, companies with incomes up to $300,000 are also eligible for a partial tax
exemption that translates to an effective tax rate of 8.5%.
Source: Inland Revenue Authority of Singapore5
Industry-Specific Tax Exemptions
Singapore also offers industry-specific tax exemptions for certain businesses. Industries
eligible for tax exemptions include foreign banks, qualifying offshore funds and global
trading companies. Additionally, banks are eligible for a withholding tax exemption on
payments to non-resident individuals, which applies to payments made between April 1, 2011
and March 31, 2021, based on agreements that take effect between those dates. Qualifying
offshore funds are also exempt from tax on specified income. Singapore defines specified
income as dividends, gains, profits and interest from traditional investments including
deposits, bonds, shares, stocks and securities. Global trading companies are eligible for
especial tax rates of 5 to 10% for five to 10 years if they qualify for Singapore's Global
Trader Scheme. Singapore typically grants Global Trader status to companies with
established track records of performance in international trade.
Low personal and corporate tax rates and other incentives for investors, short time to
process administrative work along with other factors, Singapore attracts a lot of foreign
capital pouring in the country and many big corporations choose Singapore to locate establish
their regional headquarters in the Asia Pacific region such as Facebook, Unilever, Apple,..
II.1.2. Tax revenue relevant to possession of vehicle
S$9.12 billion came from Vehicle Tax and Vehicle Quota Premium or COE Premium in
There are 5 main factors that would determine the price of a brand new car in Singapore.
They are the Open Market Value (OMV), the Additional Registration Fee (ARF), Excise Duty
& GST, Certificate of Entitlement (COE), and local dealers’ margin.
(1) Open Market Value (OMV)
Think of a car’s OMV as a baseline guide to the original price of the car. If not for taxes,
COE, ARF or other form of taxes, we could have bought the car at the OMV price. The OMV
prices we see are what some people in other countries are paying for the exact same car.
For example, a brand new Audi A4 has an OMV of about $32,000. In some European
countries such as Germany, you would be able to get the car at about that price.
In Singapore, it currently retails at $161,000. Why is that so? Here are the other factors
(2) Additional Registration Fee (ARF)
In Singapore, all cars would be subjected to the ARF. The ARF is a form of tax imposed
on all cars during registration. The ARF is calculated based on the OMV of the vehicle.
Table 3. The calculation of ARF
Source: Dollars and Sense6
(3) Excise Duty and GST
Excise Duty is a form of tax imposed on specific goods within a country. For example, in
Singapore, we have additional taxes on goods such as alcohol, cigarettes and petrol.
The Excise Duty on cars in Singapore is 20% of OMV. Once the Excise Duty of 20% is
added to the OMV, a further 7% GST will be tax on both the amount for the OMV and Excise
For example, a Mercedes E200 that has an OMV of $49,113 will incur an excise duty of
$9,822 (20% of $49,113) and a GST of $4,125 (7% of $49,113 + $9,822),
(4) Certificate of Entitlement (COE)
Even non-car owners would know about the COE. The COE is “market-driven” certificate
that allows a car to be driven on Singapore road for 10 years. Anyone who wishes to register
a new vehicle in Singapore must first obtain a Certificate of Entitlement (COE) COE prices
can increase steeply during period of high car demand, which in turn cause prices of cars to
increase. This method is used to limit new vehicles registered.
COE prices are currently between $40,000 and $50,000.
(5) Dealers’ Margin
Last but not least, the car dealers that are selling you the car would also need to cover their
own overheads and earn a profit for themselves. We call this dealers’ margin. Dealers’ margin
could range from as little as about 15% for affordable brands to as high as 50% or more for
luxury car brands.
To calculate what the dealers’ margin is, simply sum up the OMV, ARF, Excise Duty, GST
& COE. SGCarmart refers to this as the “basic cost.” We then compare the basic cost against
the actual sales price, with the difference being the dealers’ margin.
For example, a Mazda 6 currently has a basic cost of $92,520 with a sales price of
$122,888. Hence, the dealer’s margin for the car is about 33%.
(6) Carbon Emissions-Based Vehicle Scheme (CEVS)
Carbon Emissions-Based Vehicle Scheme was introduced in 2013 to encourage people to
adopt environmental-friendly cars with low carbon emissions. Depending on your car’s
carbon emission, you can either get a rebate or a surcharge, which can be viewed from the
Additionally, Singapore intends to implement a carbon tax from 2019 as part of its efforts
to cut greenhouse emissions, Finance Minister Heng Swee Keat announced in his Budget
2017 speech on February 20th. The tax is likely to be between $10 and $20 per ton of
greenhouse gas emissions.
The Government is trying to curb the car population by driving prices upwards and
making cars more unaffordable. With that policy, except from the tax collected from the
extraordinary fee, the authorities can limit the number of cars on road as the country are
becoming dense. The country is also good at using tax as a tool to control the negative
externalities such as environmental issue.
II.2. Public Sector Pay
Salaries are a crucial determinant of socio-economic policy, creating a motive force for
economic growth and equality, social progress, capacity building and state management as
well as exploiting creativity potential of workers. For a decade, Singapore has been the
country with the highest per capita income among ASEAN member states, especially in
public sectors and civil services. The Civil Service is the largest employer in Singapore,
comprising about 6.5% of the resident workforce. Hence, the civil service salary scheme sets
the tone for “market rate” compensations in Singapore. This help the country own one of the
world’s leading transparent government systems.
II.2.1 Experience in reforming salary policy for Singaporean civil servants
Highly competitive and reasonable salary policy
One of the prominent points in Singapore public sector pay is the high salary for civil
servants. Ministers in Singapore have the highest wages among ministers in the most affluent
countries. Despite that, Singapore decide to increase their salaries to encourage them work
efficiently. More importantly, in order to ensure the living of young and promising civil
servants and avoid brain drain, the authority has increased the salary of young civil servants
to nearly equal level of employees aged 32-35 in private sectors.
Figure 2. Pay levels of world leaders in perspective
Singapore government also increased the starting salary for senior officials (holding such
positions as Permanent Secretary, Ministerial Advisors, Ministers, Prime Minister and the
President). In addition to the fixed amount of money each month, their salary includes the
portion paid according to economic efficiency and annual job performance. This will
stimulate them to strive in their career.
Although in Singapore education levels still play an important factor in determining
starting salaries, Singaporean government has applied market standards to determine salaries
for civil servants. In order to attract talent from the private sector and to deter the corruption
that afflicts other Asian countries, the government often relies on private sector revenue to
allocate salaries for civil servants.
The salary level of civil workers hence has been increased significantly in accordance with
the low hires and high separation rates.
Table 5. The revised Civil Service salaries for the various MX pay grades in 2015
(Last two revisions were: +5% Aug 2014, +5% Feb 2012)
– S$15,280 /
– S$9,980 /
– S$7,115 /