Some of the most competitive tax rates in Asia attract many businesses to Singapore while a general goods and services tax reduces the amount personal income tax paid.
Recently the Goods and Services Tax (G&S Tax) was increased to seven percent, which reduces the amount of direct taxes needed to be paid by the population. All goods and services are taxed except residential properties and most financial services. Another advantage of a tax like this is that it is self-policing, meaning it is almost impossible to cheat the system, unlike the income tax system.
Personal income tax is relatively low due to the G&S Tax. The highest tax bracket in 2008 was only 20% for those making S$320,000 or more. All income made in Singapore is subject to the tax. Income made abroad is not taxed at all unless it is income made through a company in Singapore with a foreign partnership. If you need advice or are unclear on what you owe, there are tax brokers within Singapore that will help for a fee.