Individuals resident in Singapore are taxed on a progressive tax rate as listed below. Filing of personal tax return is mandatory if your annual income is S$22,000 or more. You do not need to pay tax if your annual income is less than S$22,000. However, you may still need to file a tax return if you have been informed by Singapore tax department to submit your tax return.
All resident individual tax payers will be given a one-off income tax rebate of 20%, upto a cap of S$2,000, for the tax payable for YA 2009.
Since January 1, 2003, Singapore has adopted a single-tier corporate income tax system, which means there is no double-taxation for stakeholders. Tax paid by a company on its chargeable income is the final tax and all dividends paid by a company to its shareholders are exempt from further taxation.
There is no tax on capital gains in Singapore. Examples of capitals gains include gains on sale of fixed assets, gains on foreign exchange on capital transactions, etc.
Singapore's headline corporate tax rate is a flat 18% at present, and it has declined steadily over the last decade from 27%. Effective 2010, the corporate income tax rate will be further reduced to 17%.
Headline income tax rate in Singapore as in many other jurisdictions does not necessarily provide an accurate indication of effective corporate tax rate. The effective rate is normally lower than the headline tax rate due to applicable tax exemptions and tax incentives, depreciation rules, etc.
Source: SIAC
If and when the US gets a proper leadership system, Thomas Friedman should be a special advisor.
See: http://www.nytimes.com/2010/10/03/opinion/03friedman.html?_r=1&hp
As Friedman points out, America is badly broken, and it’s because of the ossification, as he puts it, of both political parties. We need a new constitutional convention. Our constitution is obsolete in our present day and age, as it was written for a world that no longer exists. Our butts are getting kicked by Asian economies that are far more nimble and run much more like businesses than governments. It is not just their labor cost advantage. The people in Singapore and Hong Kong make as much or more than Americans. I have seen Singapore, Hong Kong and China up close, and much of it is refreshing, vibrant, and they are highly profitable. Singapore and Hong Kong have the clear advantage over China of much cleaner air, but China will clean up their air with time. Much of the rest of the industrialized world went through times of severe air pollution, acid rain, undrinkable water, rivers that have caught on fire, etc.
Singapore is an intelligently directed economy, where politicians are paid high salaries to lead the country in the proper business direction. They have a clear vision of which opportunities to pursue to optimize growth. As evidence, their stock market was up 18% in Q2, while they have consistently reduced corporate income taxes over the last decade. Coincidence? They have constructed their economy to drive it uncompromisingly in the direction of profitable growth. It is far more nimble than any country I have seen, but certainly it’s smaller size makes that easier. However, I refuse to believe that Singapore's system cannot be scaled.
Singapore's average population is much better educated than the US and over 80% are bilingual. It is a country with almost zero natural resources, yet it is extremely profitable, primarily because it is run like a real business. One key is that Singapore heavily leverages government owned venture funds, two of which are over $100B in size. This is impressive for a country with a population of just 5.5M. The US needs to do the same thing, except Washington cannot get out of its own way. We do not elect politicians who know how to run a business. Instead, over 70% of our politicians are lawyers, who have never run a profitable business.
One could argue that the US NIH’s $30B per year of grants is a form of government directed venture capital, and it is, but it is a partial solution. By contrast, Singapore has a large biotech park, larger than any such biotech park in the US, called Biopolis, with a government sponsored CRO (Contract Research Organizations for running clinical trials). This CRO is not-for-profit and its costs are 50% paid for by the government. This makes Singapore far more attractive for running clinical trials than any country on earth. Biopolis has been so successful in attracting leading biotech companies from around the world that Biopolis II is in the planning stages. Quality housing, restaurants, shopping, etc for biotech workers are part and parcel of the Biopolis complex.
To complicate matters worse, the US is hamstrung by an FDA that creates unnecessarily high hurdles for companies to overcome. It is far more expensive to bring a medical product to market in the US than any other country in the world. This is one of the big reasons the US spends 1.5 times more per capita than any other nation on healthcare.
Much of the $30B a year of NIH grants is wasted as a source for US product development and innovation, since scientists cannot afford to bring their innovations to market. There is a huge funding void in the US to bring these innovations from the laboratory to the market. As a result, it’s far more affordable for US-based VC’s to find attractive biotech developments that have been funded by US NIH grants and bring them to market abroad. This means US taxpayers are effectively funding the exportation of our innovation. Put another way, the US system has created a market inefficiency that results in exporting innovation at a time when we desperately need to create jobs in the US.
Further fueling these flames is that capital gains taxes have been as high for US VC-backed firms as for established companies. Obama’s recent proposed tax break for capital investments in small companies is a step in the right direction, but it is too little too late, and the GOP have been an inexplicable impediment to this legislation – more to Friedman’s point of political ossification.
The US deserves a lot better, and Singapore can provide some guidance as to how to best get there.
