MOF seeks comments on proposed changes to Income Tax Act 1947 to effect tax measures announced in 2022 Budget Statement and other changes

28 June 2022

From 8 June 2022 to 6 July 2022, the Ministry of Finance (“MOF”) is seeking comments on proposed changes to the Income Tax Act 1947 (“ITA”). The proposed changes are to effect tax measures announced in the 2022 Budget Statement and changes arising from a periodic review of the tax system (such as to revise existing policies or improve tax administration). MOF has released a draft Income Tax (Amendment) Bill 2022 which provides for these amendments.

Budget 2022 amendments

Proposed amendments include the following:

  • Personal income tax (“PIT”) of tax-resident and non tax-resident individual taxpayers: The top marginal PIT rate of tax-resident individuals will be increased from the Year of Assessment (“YA”) 2024. The portion of chargeable income in excess of S$500,000 up to S$1 million will be taxed at 23%, while that in excess of S$1 million will be taxed at 24% (both up from 22% currently). The PIT rates for certain income derived by non-tax-residents will also be revised to 24%, to continue to be aligned with the top marginal tax rate of tax-residents. The proposed amendments will take effect from the YA 2024. For income due to non-tax-resident individuals that is subject to withholding tax (“WHT”), the change in WHT rates will take effect for payments made from 1 January 2023.
  • Facilitate disclosure of company-related information for official duties: To support data-driven policymaking, operations and integrated service delivery, the following changes are to the ITA and Goods and Services Tax Act 1993 (“GSTA”) will be made to facilitate the disclosure of company-related information by the Inland Revenue Authority of Singapore (“IRAS”) for official duties:
    • Where taxpayers have provided consent for their information to be shared, IRAS can disclose such information to a public officer (or any other authorised person outside the public sector who is engaged by the Government or a statutory board) for the performance of his official duties. Currently, this is allowed only for administering any written law or public scheme.
    • IRAS may, without the taxpayer’s consent, also disclose a prescribed list of identifiable information on companies to public sector agencies for the performance of official duties. The company-specific information shared will be made less granular to preserve the company’s confidentiality, e.g. the prescribed list will include the sales revenue band that an identified company belongs to, but not the exact value of its sales revenue. Annex A, which can be found on the MOF consultation page, provides a list of identifiable company ITA and GSTA data items.

These proposed amendments are expected to take effect from the date the Amendment Act is gazetted.

  • Other Budget 2022 amendments: Changes to the ITA are also proposed to effect other tax measures announced in the 2022 Budget Statement including the following:
    • Extend the Aircraft Leasing Scheme to 31 December 2027.
    • Extend certain tax incentive schemes for Project and Infrastructure Finance till 31 December 2025.
    • Extend the WHT exemption for non-tax-resident mediators and arbitrators till 31 March 2023. From 1 April 2023, gross income derived by non-tax-resident mediators and arbitrators from mediation and arbitration work respectively carried out in Singapore will be subject to a concessionary WHT rate of 10%, subject to conditions.

Other proposed amendments

These proposed amendments include the following:

  • Provide expressly that the Comptroller of Income Tax has the power to extend the deadlines for the filing of estimates of chargeable and partnership income, and employee income returns. A related amendment to the Property Tax Act 1960 is proposed to empower the Chief Assessor to extend the deadline for filing notices of chargeability and transfer of property. A similar amendment is proposed to empower the Comptroller of Goods and Services Tax to extend the deadline for the filing of GST returns. This amendment to the Goods and Services Tax (General) Regulations will be made separately.
  • Amend the definition of “local employee” under section 37O of the ITA to recognise central hiring and secondment arrangements under the Mergers and Acquisitions Scheme.
  • Streamline the provisions concerning the Board of Review (“BOR”) and empower BOR Chairpersons with discretion to convene a one-member coram, instead of the default three-member coram, for BOR hearings.

Reference materials

The following materials are available on the MOF website www.mof.gov.sg: