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Singapore Budget 2011 - Personal Income Tax

One-off Personal Income Tax Rebate for Resident Individual Taxpayers

In view of stronger than expected revenues in 2010, the Government has announced that a personal income tax rebate of 20% will be given to Singapore tax resident individuals for YA 2011. The rebate will however capped at $2,000.

With effect from YA 2012, a more progressive personal income tax schedule will be introduced. In particular, the marginal tax rates will be reduced for the first $120,000 of chargable income.

Current tax structureTax structure with effect from YA 2012
Chargable Income *
(S$)		Tax rateGross tax payable
(S$)		Chargable Income *
(S$)		Tax rateGross tax payable
(S$)
on the first
on the next		20,000
10,000		0%
3.5%		0
350		on the first
on the next		20,000
10,000		0%
2%		0
200
on the first
on the next		30,000
10,000
5.5%		350
550		on the first
on the next		30,000
10,000
3.5%		200
350
on the first
on the next		40,000
40,000
8.5%		900
3,400		on the first
on the next		40,000
40,000
7%		550
2,800
on the first
on the next		80,000
80,000
14%		4,300
11,200		on the first
on the next
on the next		80,000
40,000
40,000
11.5%
15%		3,350
4,600
6,000
on the first
on the next		160,000
160,000
17%		15,500
27,200		on the first
on the next
on the next		160,000
40,000
120,000
17%
18%		13,950
6,800
21,600
on the first
in excess of		320,000
320,000
20%		42,700
on the first
in excess of		320,000
320,000
20%		42,350

Tax Deduction of 2.5 times the Amount of Donation

It was announced in Budget 2009 and 2010 that all donations that qualify for double tax deductions and made in calendar year 2009 and 2010 (i.e. 1 January 2009 to 31 December 2010) would temporarily qualify for 2.5 times tax deduction.

To encourage greater charitable giving in Singapore as the economy recovered, the Minister for Finance announced in Budget 2011 that tax deduction of 2.5 times will be extended for another 5 years to donations made from 1 January 2011 to 31 December 2015.

All other conditions for tax deduction remain unchanged, e.g. the carry-forward of unutilised donations up to a maximum of five years, order of offset rules (i.e. to allow deduction on the unutilised donations on the basis that donations made on an earlier date shall be allowed first), as well as imposing the shareholding test on corporate donors before any unutilised donations can be allowed tax deduction.


Exemption of alimony and maintenance payments, and exclusion of ex-spouses from claiming spouse relief and handicapped spouse relief

Individuals will be exempted from tax on alimony and maintenance payments which they receive under a Court Order or Deed of Separation. With this exemption, individuals will not be taxed on their alimony and maintenance payments, whether paid voluntarily or a Court Order or Deed of Separation by their former spouses or spouses.

Spouse relief and handicapped spouse relief are intended as recognition for individuals who support their spouses. Such reliefs will no longer be granted to individuals for maintaining their former spouses.

These changes will take effect from YA 2012.


Higher Central Provident Fund (CPF) Employer's Contribution Rate and Salary Ceiling

The Government will raise the employer contribution rate by another 0.5% point, from 15.5% to 16%, which will restore the total contribution rate to 36%. The additional 0.5% will go into Special Account.

In addition, the CPF salary ceiling will also be revised from $4,500 to $5,000 per month to keep pace with income growth in recent years.

To give employers sufficient time to adjust, both these changes will take effect in September 2011.

In line with the higher CPF ceiling, the Government will also raise the contribution cap within the SRS. This means that with effect from September 2011, annual SRS contribution cap will be increased to $12,750 for Singaporeans and Singapore permanent residents and $29,750 for foreigners.
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