Major Tax Updates in Singapore

Raise the consumption tax rate
Singapore’s current GST rate for standard taxed goods and services is 7%. The Ministry of Finance announced that the GST rate will be increased to 8% on 1 January 2023 and 9% on 1 January 2024. The increase in GST rates is expected and inevitable as Singapore must ensure long-term fiscal sustainability, including supporting rising healthcare spending due to an ageing population.

Update on GST specifications for arranging travel services
Currently, travel arrangement services are zero-rated if they include arranging international transport (and related insurance) and arranging accommodation outside of Singapore. However, the services of arranging accommodation within Singapore are at the standard rate. From 1 January 2023, the GST treatment for travel arrangement services will be updated to be based on the location of the contract customer and direct beneficiary.The location of the contract customers and direct beneficiaries of the service. For zero-rated services, the contract customer must be outside Singapore and the direct beneficiary must be outside Singapore or GST registered in Singapore.

Raise the personal income tax bracket
The current personal income tax rate structure in Singapore has been implemented since 2017. Currently, taxable income over S$320,000 is taxed at the top rate of 22%.
In order to increase the progressivity of personal income tax, the top-end tax rate for personal income tax will be increased from 2024.
1. Taxable income exceeding S$500,000 but not exceeding S$1,000,000 will be taxed at a rate of 23%.
2. Taxable income exceeding S$1 million will be taxed at a rate of 24%.
The two tiered incomes are currently taxed at 22%.