Budget 2022: Singapore to strengthen current system of taxes

Singapore will strengthen its current system of taxes even as it continues to study the experiences of other countries and explores options to tax wealth effectively.

Finance Minister Lawrence Wong highlighted in his Budget speech on Friday (Feb 18) that wealth taxes are an important part of Singapore's tax system, as they generate revenue and mitigate social inequalities by recirculating a portion of the wealth stock into the economy.

Singapore currently taxes wealth in several ways, including property tax, stamp duties and the additional registration fee for motor vehicles.

"Wealth taxes are therefore needed to build a fairer society where everyone can aspire to succeed regardless of their backgrounds," he said.

"Ideally, we would want to tax the net wealth of individuals. But such a tax is not easy to implement effectively. Estimating wealth accurately and fairly is a more complex exercise than estimating incomes. Further, many forms of wealth are mobile, and as long as there are differences in wealth taxes across jurisdictions, such wealth can and will move," he added.

Wong also pointed out that other countries face such challenges, with the likes of Germany, France and Denmark no longer levying taxes on the net wealth of individuals.

The number of OECD countries that levy net wealth taxes have declined from 12 in 1990 to just 3 in 2020.

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