Among the highlights of tax changes affecting individual taxpayers, as announced by Singapore’s Minister of Finance, Tharman Shanmugaratnam on 23 February 2015 are as follows:
1) Changes to personal income tax rate structure
The tax rates for high income earners has been increased by 1% – 2% for chargeable income of $160,001 and above. This is in line with what other countries are doing now – to tax the rich more.
2) Personal income tax rebate of 50% capped at $1000 per taxpayer in YA 2015
Some consolation for taxpayers as part of Singapore’s 50 years celebration of nationhood this year.
3) Simplified claim for rental expenses
Residential properties owners may claim the rental expenses based on 15% of the gross rental income in lieu of the actual amount of deductible expenses (excluding interest expense). This takes effect from YA 2016. However, take note that this concession is not applicable to owners who receive the rental income from commercial or industrial properties or from carrying on a trade or business of renting out properties
4) Increased tax deduction to 3 times for qualifying donations made in 2015
This increased deduction is only for donations made in 2015, also in conjuction with SG50 celebrations. It will revert back to 2.5 times from year 2016 to 2018.
5) Increase in SRS contribution cap
The cap will be increased to $15,300 (citizens & PR) and $35,700 (non-citizens and non-PR). This is good news indeed for those who can put aside extra funds for their future retirement and at the same time take advantage of the tax relief claim for SRS contributions made.