Singapore Budget Commentary 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