More Relieved With Tax Relief

In this world, nothing is certain but death and taxes

— Benjamin Franklin

If you earn an income, you’ll have to pay taxes every year. Your tax dollars are used to fund government programs and pay for public goods. In Singapore, we are fortunate enough to benefit from one of the lowest tax jurisdictions in the world. However, there are ways for us to reduce our taxes even further.

Even though it has been implemented a fair number of years ago (2001), many people are still unfamiliar with the Supplementary Retirement Scheme (SRS). After all, unlike CPF, it is not compulsory, requires you to make the effort to open an SRS account, and remember to contribute to it each year.

The Inland Revenue Authority of Singapore (IRAS) website describes the SRS scheme as follows:

The Supplementary Retirement Scheme (SRS) is a voluntary scheme to encourage individuals to save for retirement, over and above their CPF savings. Contributions to SRS are eligible for tax relief. Investment returns are tax-free before withdrawal and only 50% of the withdrawals from SRS are taxable at retirement.

So, reduce your taxes by contributing to your SRS account before 31 December 2020! After all, who doesn't want to pay less to the taxman? There is a maximum contribution of $15,300 for Singapore Citizens and PRs, and $35,700 for foreigners, but reducing your taxable income by that amount could help you drop to a lower tax bracket.

But remember, don't just leave your money in the SRS bank account; it could be sitting there earning almost zero interest for a very long time. Talk to us about how you can make the most of your SRS monies, e.g. buying a retirement annuity or investing it, choosing from a range of strategies to suit your investment preference and risk tolerance – the goal of which is to grow this amount over time.

Please speak to your adviser if you’d like more details on the SRS scheme, account, and or investments. You can also visit the IRAS website for more information.