(SINGAPORE) The taxman's takings hit a five-year high last financial year as the ranks of the wealthy continued to grow. But the cost of tax collection continued to remain competitive.

Total tax takings hit $22.9 billion in financial year 2006/2007, the Inland Revenue Authority of Singapore (IRAS) says in its latest annual report. That was up 15 per cent from the $19.9 billion collected in FY05/06.

The total amount of tax collected has grown steadily over the years. It was $16.6 billion in FY02/03, $16.5 billion in FY03/04 and $17.9 billion in FY04/05.

Meanwhile, the million-dollar club in Singapore continues to grow. The IRAS annual report shows that 2,121 taxpayers earned more than $1 million in Year of Assessment 2006, which assesses income earned in 2005. That was 22 per cent up from 1,738 million-dollar earners in 2004.

The bulk of these wealthy people were Singapore residents, with only 31 non-residents. For tax purposes, residents are defined as those physically present in Singapore for at least 183 days in a year.

The total income of this exclusive club has also grown. Their total assessable income earned in 2005 was $4.2 billion, up from $3.4 billion the year before. And the total tax assessed on their income was $682 million - about 17 per cent of total income tax collected from all individuals that year.

While collections grew, IRAS has succeeded in keeping its cost per dollar of tax competitive, compared with other tax administrations. The cost per dollar of tax collected in the latest financial year was 83 cents, compared with 93 cents the year before. IRAS said this was because operational costs increased at a much slower rate than tax collection. The authority has kept the average cost per dollar of tax collected over the past five years at about one cent.

On a broader level, the taxman's takings last financial year grew as a proportion of the government's total operating revenue.

The $22.9 billion in tax collected was 73 per cent of total government operating revenue of $31.3 billion, up from 70.5 per cent in FY05/06 and 65.3 per cent in FY04/05.

Corporate tax continued to be the largest source, contributing $8.5 billion to total tax collected. Personal income tax came next, at $4.7 billion. This was followed by Goods and Services Tax at $4 billion and stamp duty and property tax at about $2 billion each.

Taxes and penalties arising from tax compliance violations continued to grow last financial year, when $62.9 million was spent on audits for income tax, up from the $61.4 million spent the year before. But the number of audit cases fell to 3,737 in FY06/07 from 4,684 in FY05/06.

The penalties levied for GST cases fell to $52 million from $76.2 million, with GST refund review cases no longer included in the total figure. IRAS spent $20.7 million investigating 96 tax cases last financial year, compared with $32.4 million spent on 92 cases the year before.

In terms of financial performance, IRAS's operating surplus grew 48 per cent to $59.2 million in FY06/07, from $40 million in FY05/06. This was due mainly to higher income from agency fees, as tax collection increased.

IRAS also saw a jump in investment income to $25 million from $18.5 million, thanks to interest earned on fixed deposits and bonds, dividends and capital gains from its equities and bond portfolios.

» IRAS' annual report

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