Budget 2016 Quick Takes: Cap on personal income tax relief to hit high income females

SINGAPORE'S Ministry of Finance Heng Swee Keat announced in Parliament on Thursday that the total amount of personal income tax relief an individual can claim will be capped at S$80,000 per Year of Assessment.

At this threshold, 99 per cent of tax-resident individuals will not be affected, he said, adding that the cap will make the country's personal income tax regime more progressive.

Here are some comments:

BJ Ooi, Head of Global Mobility Services, KPMG Singapore:

"The cap on total reliefs of S$80,000 will take effect from YA2018 - High income female workers with children will feel the impact, and should take measures to prepare for this."

Jill Lim, Global Employer Services Leader, Deloitte Singapore:

"The capping of the personal tax reliefs to S$80,000 comes as a surprise and appears to be contradictory to the Government effort to encourage procreation."

"Typically it is the female individual taxpayers with Singapore citizen children who are able to enjoy personal tax reliefs that may be in excess of S$80,000, as they get to enjoy Working Mother's Child Relief (WMCR) with a cap of S$50,000 on each qualifying child . However, with this cap, this seems to send a message that such high-income earning females are not encouraged to have more children, or should not return to the workforce after they have children."