It is coming to the end of the year soon and we will need to file our taxes!
I was just looking at the tax brackets and see where I stand, and if I need to cut some taxes by doing a CPF top up or putting money into SRS. I always believe Singapore income tax is lesser than most of the developed countries. Curious, I went to take a look at the US income tax and made a comparison.
The first table below shows the Singapore tax brackets (2010):
The following table shows the US tax brackets (2010) Note that I have converted USD to SGD at a rate of 1.3:
Did you manage to spot the difference?
In Singapore, the first S$20,000 is not taxed. Whereas in US, you will be taxed for as little as first S$10,000 of your income, at a rate of 10%. Secondly, a Singaporean will only pay tax around S$4,000+ when he is taking in S$80,000. Comparing to an American who pays a tax of S$4,000+ when he earns S$33,000! No matter at which level you compare, Singaporeans are paying less income tax than Americans. I know what you are thinking – how about GST, ERP, etc? Those are consumption taxes which I think it is fair. The more you consume, the more you pay. A lower income tax, especially waiving the first S$20,000, do help to alleviate the financial problems of the poor.
GST is a regressive tax: it affects the poor more than the rich because the poor need to consume more than the rich in proportion to their income as the rich have more money to save: in effect GST taxes the poor more in proportion to their income.
Singapore, furthermore has one very expensive tax: the SLA tax and once more the poor are not faring well: in order to get a roof over their head all need to pay the cost of land fixed by SLA.
No, seriously, Singapore should rethink is strategy and move some of its receipts to income tax => the picture would be a lot clearer (and it could be made fairer by having more and higher tax brackets)
This is somewhat apple and oranges to the content of the blog post, but have you noticed that in Singapore, one of the main feature of the government’s policy execution is always to take first and then return later?
Of course, the incumbent cabinet seems to either have no awareness of what the commons feel, hence you have PM Lee’s infamous comment that raising the GST will enable them to help the poor. I believe this a prime generator of resentment amongst the commons.
How about a comparison to Hong Kong? That is closer to home and would be interesting.
In the US.. you pay BOTH Federal and State taxes.
and there is capital gains taxes too.
How an american taxed if working permanently in Singapore (double taxed or not) with an example income of S$160000? Thanks!
Hello Howard, I am not a tax expert.
Quoting Expat Singapore: “Non-residents are taxed at either a flat rate of 15 per cent on employment income, without personal reliefs, or the residents’ graduated rate, whichever is higher. In addition, non-residents are taxed a flat rate of 27 per cent on non-employment income derived from Singapore.”
Singapore has tax relief agreements with 34 countries to avoid double taxation. See http://www.singaporeexpats.com/guides-for-expats/relocation-to-singapore.htm#Taxes for more details
Alvin, Thanks a lot!
U forgot about the 18,000 tax per year Americans pay on a 500K house every year