Entrepreneurs, corporates and professionals consider to transfer and set up their businesses, operations and career lives in Singapore due to its tax system. The tax laws are very forward looking. It also boasts of some of the lowest rates globally. Businessmen and career persons intending to start operating in Singapore require Visa Express services in the processing of their visas and other travel and job documents. Engaging their services minimizes the time spent obtaining the documents and ensure the right visa is applied for. This article expounds on various aspects of the Singaporean tax system.
The objective of taxation
Tax revenue is utilized to build Singapore as a stable nation and a well-performing economy. The expenses of the state that include social development expenditure and external expenses are funded majorly using taxes. The goals of the Singaporean tax system are threefold: to facilitate economic growth devoid of inflation, to have a budget that is balanced and to concentrate government resources on the provision of social amenities such as education, health facilities and environmental conservation.
The entity that collects the various types of taxes is IRAS-the Inland Revenue Authority of Singapore. It operates under Singaporean finance ministry. There is a set of laws that guide the administration of tax. The laws include: Income Tax Act, Stamp duty Act among others. Singapore is a signatory to 76 agreements on avoidance of double taxation.
Tax policy in Singapore is a crucial part of the monetary policy. Its main aims are to raise funds for the government projects. Its other goal is to push for economic advancement and social prosperity. The main principle of Singaporean tax system is to have the rates being competitive for both persons and businesses. Competitive rates are seen as a great attraction for foreign investors. Low tax charges encourage people to put more efforts, and to try setting up various business.
Classification of taxes
Several kinds of taxes exist in Singapore. They include tax on income, corporate tax, property tax, and motor vehicle taxes. Other taxes include customs duty, excise duty and casino taxes. There are also taxes such goods and service tax, and stamp duties. There are also other forms of taxes such as the foreign worker levy that is meant to check on the employment of foreigners in Singapore.
income tax from taxable residents is paid on yearly basis and is based on the graduated tax system with rates ranging between 0% and 22%.Every person irrespective of the residence status is compulsorily needed to file separate returns every calendar year on all his or her profits from a venture or a profession and proceeds from employment. Non-residents whose working period in Singapore is 60 days or less in a year are exempted from taxation with exception of directors, performing artists and professional practicing in Singapore. Corporate tax just as the individual is paid annually. The rate has been 17% since 2010.It is calculated on the taxable revenue less any permitted expenses.