Taxation in Singapore

Taxation In Singapore

Singapore has a highly developed and successful market economy. It has an open, pro-business environment, relatively corruption-free and transparent, stable prices, low tax rates (14.2% of GDP) compared to other developed economies, and one of the highest per-capita gross domestic products (GDP) in the world. Singapore's sovereign wealth fund Temasek Holdings is a large investor in the economy, holding majority stakes in several of the nation's largest companies, such as Singapore Airlines, SingTel, ST Engineering and MediaCorp.

Exports, particularly in electronics and chemicals, and services including the posture that Singapore is the regional hub for wealth management (and the opening of the city state's first casino in 2010) provide the main source of revenue for the economy, which allows it to purchase natural resources and raw goods which it does not have. Moreover, water is a scarcity in Singapore therefore water is defined as a precious resource in Singapore along with the scarcity of land to be treated with land fill of Pulau Semakau. Singapore has limited arable land that Singapore has to rely on the agrotechnology park for agricultural production and consumption. Human Resource is another vital issue for the health of Singaporean economy.

Singapore could thus be said to rely on an extended concept of intermediary trade to Entrepôt trade, by purchasing raw goods and refining them for re-export, such as in the wafer fabrication industry and oil refining. Singapore also has a strategic port which makes it more competitive than many of its neighbours in carrying out such entrepot activities. The Port of Singapore is the busiest in the world, surpassing Rotterdam and Hong Kong. In addition, Singapore's port infrastructure and skilled workforce, which is due to the success of the country's education policy in producing skilled workers, is also fundamental in this aspect as they provide easier access to markets for both importing and exporting, and also provide the skill(s) needed to refine imports into exports.

Singapore's government promotes high levels of savings and investment through policies such as the Central Provident Fund, which is used to fund its citizen's healthcare and retirement needs. Singapore's savings rates have remained among the highest in the world since the 1970s. Most companies in Singapore are registered as private limited-liability companies (commonly known as "private limited companies"). A private limited company in Singapore is a separate legal entity, and shareholders are not liable for the company's debts beyond the amount of share capital they have contributed.