Revenue boost driven by corporate and personal income taxes as well as a booming property market
Singapore’s tax revenue surged by 22.4% to S$60.7 billion for the financial year 2021/22, a significant recovery following the pandemic-induced decline in the previous year. The year before, tax collection had fallen by 7.3%, marking the first decline in over 15 years. The latest growth was observed across all tax categories, reflecting a broader economic rebound as Singapore emerged from the impacts of Covid-19.
Corporate income tax remained the largest contributor to the tax revenue, accounting for 30% or S$18.2 billion, a 13% increase from the previous year. This was followed by individual income tax, which contributed 23% or S$14.2 billion, reflecting an 11.6% rise from the previous year. These increases were largely attributed to stronger earnings and the deferment of tax payments in FY2020/21, which had been introduced as support for businesses during the pandemic.
Economists noted that many sectors, particularly those that were heavily impacted by the pandemic such as hospitality, aviation, retail, and food and beverage industries, had seen a significant recovery in revenue and profitability. The tax rebound indicates not only the resilience of businesses but also the effectiveness of government support measures during the pandemic.
In addition to corporate and individual income taxes, other areas also showed significant growth. Stamp duty collections rose by 73.6% to S$6.8 billion, driven by a buoyant property market and increased property transactions. Goods and services tax (GST) revenue also increased by S$2.3 billion to reach S$12.6 billion, reflecting higher consumption as restrictions eased and economic activities normalized.
With the strong recovery in tax revenue, analysts predict that Singapore’s government could surpass its earlier revenue projections, providing room for potential fiscal support packages without jeopardizing fiscal balance. The outlook for government revenue remains positive, indicating sustained economic growth moving into the following fiscal year.
