Every country’s tax authorities will impose personal income tax rates on the country’s citizens at rates deemed to be suitable. Of course, certain countries will have higher tax rates than others. When looking at the statistics from a global standpoint, Singapore has been shown to have among the world’s lowest personal income tax rates.
In Singapore, personal income tax rates for residents range from 0% to 22%. These rates are progressive, meaning that the more chargeable income a taxpayer earns, the higher the tax rate at which the taxpayer is required to pay. Those who earn less than S$20,000 in chargeable income per year do not have to pay any personal income tax. Conversely, the maximum personal income tax rate of 22% must be paid by those who earn at least S$320,000 in chargeable income every year.
Singapore Tax Rates vs Global Tax Rates
When Singapore’s personal income tax rates are compared to those of other notable countries in the Asia-Pacific region, it can clearly be seen that Singapore imposes low personal income tax rates. Personal income tax rates in China range from 0% to 45%; in South Korea, 7.8% to 53.4%; in New Zealand, 0% to 40%; in India, 0% to 30%; and in Japan, 15.105% to 55.945%. Notably, Singapore’s maximum personal income tax rate of 22% is far below the maximum rates of the vast majority of its regional neighbors.
Relative to other countries of similar wealth, Singapore also has much lower personal income tax rates. According to the International Monetary Fund, the three countries with the closest nominal GDP per capita to Singapore are the United States, Denmark, and Australia. In the United States, personal income tax rates range from 10% to 37%; in Australia, 0% to 45%; and in Denmark, 36% to 52.02%. Singapore’s personal income tax rates ranging from 0% to 22% once again place it well below its economic peers in this respect.
Singapore’s low tax rates have allowed its economy to benefit in various ways. One of these ways is the fact that the low rates attract high-earning, high-ranking professionals from around the world. The contributions made and business activity conducted by such people will spur the growth of the Singaporean economy. It can easily be said that one of the major factors that made Singapore a world business hub is its low personal income tax.