Singapore intends to raise its effective tax rate for multinational firms to 15% starting 2025. This is accordingly due to a global agreement to increase the floor rate.
The city-state will implement a ‘Domestic Top-up Tax’ to bring the effective corporate tax rate to the level of the agreement, Finance Minister Lawrence Wong said Tuesday, in his annual budget speech.
Singapore, which hosts several world-renowned multinational companies, currently has a corporate tax rate of 17%. Still, many companies are currently taxed at significantly lower rates.
While the move to align rates is expected to boost tax collections for Singapore, it is likely to weigh on multiple members of the country’s benchmark Straits Times Index.
According to Wong, Singapore will monitor international developments and will “adjust” its timeline if there are delays in implementing the global agreement.