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IRAS to watch for tax evasion through 'corporatisation'
Singapore's tax authority will step up monitoring "corporatisation" trends that suggest high-income earners are setting up companies to avoid higher income taxes, said Senior Minister of State for Transport and Finance Josephine Teo on Monday.
She noted that the main risk for higher income taxes is that Singapore's tax regime loses its competitive edge.
"Another risk is that high-income earners may set up companies essentially to avoid higher income taxes, and pay corporate taxes instead," said Mrs Teo.
"We take the evasion of taxes seriously."
She said Inland Revenue Authority of Singapore (IRAS) will monitor the "corporatisation" trend closely. In cases where it finds that the companies were set up for tax evasion, the tax authority will disregard the corporate structure, and assess the individual based on his income.
Singapore's corporate tax is at 17 per cent. With the recent move to lift income tax, the rich would be paying up to 22 per cent on chargeable income from the year of assessment 2017.