Hurrah! Lower income tax rates begin this year

And the good news doesn't stop at that as half of the 1.8m taxpayer base need not file tax returns AT ALL.

According to Inland Revenue Authority of Singapore, March marks the start of the income tax filing season. IRAS would like to remind all taxpayers, including sole proprietors and partners, to e-File their income tax returns by 18 April 2012, or send in their paper returns by 15 April 2012.

Lower Income Tax Rates from Year of Assessment (YA) 2012

From this year, all taxpayers will enjoy lower personal income tax rates. Marginal tax rates for the first $120,000 of chargeable income have been reduced to make our income tax system more progressive, with middle income earners enjoying the largest reduction in their tax bills.

Half of Taxpayers Need Not File Tax Returns

Of the about 1.8 million taxpayer base, about half of them or 963,000 taxpayers eligible for IRAS’ No-Filing Service (NFS) will not have to file tax returns at all. Instead, they will receive their notices of assessment from IRAS directly.

By now, these taxpayers would have received a letter or SMS notification informing them that they are eligible for NFS. This group of taxpayers do not need to file a return unless they have additional income to declare or changes to make to their personal reliefs. If they have also made GIRO arrangements for their tax payments, they would not have to take any action at all this filing season.

For this filing season, we have also introduced a new feature for taxpayers on the NFS. A taxpayer who is on the NFS will now be able to know how much his estimated tax is if he logs in tomyTaxPortal, IRAS’ e-Filing platform.

Taxpayers who have been on NFS in past years are not automatically eligible for NFS this year.

Any taxpayer who receives an IRAS letter or SMS notification to file his tax must e-File by 18 Apr 2012 or send in his paper return by 15 Apr 2012.

More Employees Benefit from Auto-Inclusion Scheme (AIS)

96% of taxpayers who had to file tax returns last year did so through e-Filing. This year, taxpayers would continue to enjoy the ease and convenience of e-Filing their tax returns at myTaxPortal. With more employers participating in our AIS this year, four in five, or 1.2 million employees will enjoy a simplified filing experience, as their employers would have submitted their employment income information to IRAS.

GIRO Your Tax and Win Cash!

Taxpayers who pay their taxes via GIRO deduction can enjoy up to 12 months of interest-free instalment payment. They stand to win cash prizes totalling $115,000 in the May 2012 GIRO lucky draw, with a top prize of $30,000. The longer one stays on GIRO, the higher the chances of winning the cash prizes.

Taxpayers who are already on GIRO will automatically be included in the draw. Those who have not signed up for GIRO should do so quickly. All new successful GIRO applications as of 30 Apr 2012 will stand a chance to win cash prizes in the May 2012 “GIRO Your Tax” Lucky Draw.

File Early. Avoid the Last-Minute Rush.

Taxpayers are encouraged to file early to avoid the last-minute rush and penalties for late filing. Last year, more than 90% of taxpayers filed their returns on time. For the minority that did not file on time, they had to pay penalties ranging from $150 to $1,000, with some taxpayers even summoned to Court for non-filing.