SINGAPORE: Singapore raised taxes on its top earners and unveiled new welfare for low-income elderly. Under the new tax regime, starting 2016, those making 160,000 Singapore dollars ($118,000) or above will have their marginal tax rate increased by 1 percentage point to 18%. The highest bracket income earners, earning more than S$320,000, will have their marginal tax rate increased by 2 percentage points to 22%. By comparison, Hong Kong, its most direct competitor, charges a flat rate of 17% for income exceeding 120,000 Hong Kong dollars ($15,000).
To make sure Singapore remains competitive in the financial industry, Singapore said it would extend local tax exemptions for REITs for another five years. Singapore is the largest REIT market in emerging Asia, now with more than $65 billion market value.
Year-to-date, the U.S. dollar-denominated iShares MSCI Singapore ETF (EWS) fell 1.5%, making it the worst performing market in Asia. The Singapore dollar has fallen 2.5% after the central bank loosened its peg against international currencies last month. By comparison, the iShares MSCI Hong Kong ETF (EWH) rose 5.8%. The Hong Kong dollar is pegged to the U.S. dollar.
The FTSE Strait Times Index is little changed after the 2015 budget release.
