Detailed Breakdown of SMEs and Non-SMEs' Corporate Income Tax Collections
Ministry of FinanceSpeakers
Summary
This question concerns the detailed breakdown of corporate income tax (CIT) collections, turnover, and effective tax rates for SMEs and non-SMEs between YA 2010 and YA 2019. Mr Chua Kheng Wee Louis requested data on profitability and tax residency to analyze tax contributions across different categories of Singapore-incorporated and foreign companies. Minister Lawrence Wong noted that total corporate tax collections rose to S$16.3 billion by YA 2019, with non-SMEs contributing S$11.5 billion of that amount. He explained that while SMEs had an effective tax rate of 2.8%, non-SME effective rates ranged from 8% to 10% during the same period. Minister Lawrence Wong clarified that Singapore does not differentiate tax treatment based on residency or incorporation, focusing instead on whether income is Singapore-sourced or remitted.
Transcript
76 Mr Chua Kheng Wee Louis asked the Minister for Finance with regard to corporate income tax collection (a) in each of the last 10 years, what is the assessed (i) total revenue (ii) profit before tax (iii) corporate income tax paid and (iv) average effective tax rate; and (b) what is the breakdown by (i) SMEs and non-SMEs (ii) tax resident and non-tax resident companies and (iii) Singapore-incorporated and foreign companies for each of the items as described in parts (a)(i) to (a)(iv).
Mr Lawrence Wong: Based on IRAS data available for the Year of Assessment (YA) 2010 to YA 2019, the total turnover of companies has increased from S$2.1 trillion in YA 2010 to S$4.6 trillion in YA 2019. The profit before tax for these companies were S$128 billion and S$503 billion for YA 2010 and YA 2019 respectively. The total corporate income tax paid were S$10.2 billion for YA 2010 and S$16.3 billion for YA 2019. Our corporate tax system allows companies to enjoy tax deductions, tax allowances, group relief, loss carry back, tax exemptions or tax rebates. So the average effective tax rates for all companies were 3.2% for YA 2010 and 2.7% for YA 2019.
For all SMEs or companies with turnover of up to S$100 million, their total turnover were S$365 billion in YA 2010 and S$520 billion in YA 2019 respectively. SMEs’ total profits before tax were S$31 billion for YA 2010 and S$44 billion for YA 2019 respectively. The total corporate income tax paid by SMEs were S$3.8 billion for YA 2010 and S$4.8 billion for YA 2019 respectively. The average effective tax rates for all SMEs were 3.4% for YA 2010 and 2.8% for YA 2019.
For all non-SMEs or companies with turnover exceeding S$100 million, their total turnover was S$1.7 trillion in YA 2010 and S$4.1 trillion in YA 2019 respectively. Their total profits before tax were S$97 billion for YA 2010 and S$459 billion for YA 2019. The total corporate income tax paid by non-SMEs were S$6.4 billion for YA 2010 and S$11.5 billion for YA 2019 respectively. The non-SMEs’ average effective tax rates have ranged about 8% to 10% for the same period.
Mr Chua has also asked for a breakdown of the figures for foreign and Singapore-incorporated companies, as well as for tax-resident and non-tax resident companies. But we generally do not differentiate corporate tax treatment based on the place of incorporation or the tax residency of the company. Where corporate tax is concerned, the focus is on their income sourced in Singapore, as well as their income sourced abroad upon remittance into Singapore, and not their place of incorporation or their tax residency status.