Written Answer to Unanswered Oral Question

Breakdown of Revenues, Profits and Effective Tax Rates of SMEs in Last 10 Years

4 October 2021 · Ministry of Finance

Speakers

Lawrence Wong (Minister for Finance) Chua Kheng Wee Louis

Summary

This question concerns a requested 10-year breakdown of revenues, profits, and effective tax rates for profit-making companies, categorized into SMEs and non-SMEs. Member of Parliament Louis Chua inquired about metrics including chargeable income and corporate income tax paid between the Year of Assessment 2010 and 2019. Minister for Finance Lawrence Wong provided data showing that total revenue for profit-making companies grew from S$1.8 trillion to S$3.8 trillion during this period. Average effective tax rates decreased for both SMEs and non-SMEs, reaching 4.2% and 10.0% respectively by 2019, based on a simple arithmetic mean of individual company rates. These rates were computed using chargeable income before accounting for reductions from various tax exemption schemes, group relief, and loss carry back.

Transcript

96 Mr Chua Kheng Wee Louis asked the Minister for Finance (a) in each of the last 10 years, regarding profit-making companies, what is their (i) total revenues (ii) accounting profit before tax (iii) chargeable income (iv) corporate income tax paid and (v) average effective tax rate; (b) what is the breakdown by SMEs and non-SMEs; and (c) with regard to the average effective tax rates, whether this is calculated based on aggregated chargeable incomes and taxes paid or a simple average of the effective tax rates of the respective companies in their respective years.

Mr Lawrence Wong: Based on IRAS data for the Year of Assessment (YA) 2010 to YA 2019, for companies making accounting profits:

(a) The total revenue was S$1.8 trillion in YA 2010 and S$3.8 trillion in YA 2019.

(b) The total accounting profit before tax was S$195 billion in YA 2010 and S$593 billion in YA 2019.

(c) The total chargeable income before taking into account the reduction of income via (i) group relief, (ii) loss carry back, (iii) partial tax exemption and (iv) start-up tax exemption schemes, was S$79 billion in YA 2010 and S$168 billion in YA 2019.

(d) The total corporate income tax paid was S$9.8 billion in YA 2010 and S$15.0 billion in YA 2019.

(e) The average effective tax rate (ETR), using chargeable income before group relief, loss carry back, partial tax exemption and start-up tax exemption schemes, was 5.1% in YA 2010 and 4.3% in YA 2019.

For companies with revenue of up to S$100 million, or "SMEs", which have positive accounting profits:–

(a) The total revenue was S$297 billion in YA 2010 and S$402 billion in YA 2019.

(b) The total accounting profit before tax was S$65 billion in YA 2010 and S$116 billion in YA 2019.

(d) The total corporate income tax paid was S$3.6 billion in YA 2010 and S$4.5 billion in YA 2019.

(e) The average ETR, using chargeable income before group relief, loss carry back, partial tax exemption and start-up tax exemption schemes, was 4.9% in YA 2010 and 4.2% in YA 2019.

For companies with turnover exceeding S$100 million, or "non-SMEs", which have positive accounting profits:

(a) The total revenue was S$1.5 trillion in YA 2010 and S$3.4 trillion in YA 2019.

(b) The total accounting profit before tax was S$130 billion in YA 2010 and S$477 billion in YA 2019.

(c) The total chargeable income before taking into account the reduction of income via (i) group relief, (ii) loss carry back, (iii) partial tax exemption and (iv) start-up tax exemption schemes, was S$52 billion in YA 2010 and S$131 billion in YA 2019.

(d) The total corporate income tax paid was S$6.2 billion in YA 2010 and S$10.4 billion in YA 2019.

(e) The average ETR, using chargeable income before group relief, loss carry back, partial tax exemption and start-up tax exemption schemes, was 10.8% in YA 2010 and 10.0% in YA 2019.

The average ETR of companies is computed as a simple average (or arithmetic mean) of the effective tax rates of the respective companies in their respective years.