Hear, hear, the taxman's here

When I saw the unmistakable envelope from the Inland Revenue Authority of Singapore a few days ago on the dining table, I immediately set out to open it. You see, I was expecting a bit of reduction in my income tax assessment for last year given that the government had lowered the top personal income tax rate in early 2005 to 21% from 22%. Also, 2005 was the first full year that I was going to be assessed as a permanent resident (PR) here, so I was naturally curious if the change in status would have an effect on my tax rate.

Just as an aside, the taxman here doesn't withhold tax monthly from employees the way the BIR does in the Philippines. So for the whole of 2005, I received my pay sans tax.

Then came mid-April and everyone who earned S$22,000 and above from Jan-Dec 2005 had to file their returns with the IRAS. A few months hence (a little over a month in my case) and they come back to you with their assessment which states how much you owe the government.

A taxpayer then has the option of paying the owed amount in full or in 11-12 monthly installments by direct debit from a taxpayer's specified bank account. And so goes the cycle.

And so I was in a hurry to open the envelope in my hands. And boy, did the taxman deliver good news! My tax due for income earned in 2005 has been almost halved -- from the usual 4.8-5.5% rate to just 2.7%!

(I can't help but remember at this point how the BIR used to take almost 30% of my measly income when I was working in Manila. What country! (Translation: Ano ba yan?)

A low personal income tax. Just one of the appeals of Singapore to me.