How much income tax do you pay through your portfolio of companies?

[Mushy]

Income tax. 
Something came into my mind the other day. Just sharing some thoughts and perspectives. I am not tax expert so I may generalise things. I am not looking for details but just wonder have you guys thought of the income tax you have been contributing to the nation through the companies that you own a piece of and actually calculated how much?

There are 2 types of income tax; Personal and company.

If you are employed by a company, the company pays you a salary out of its coffer. This salary has not been taxed for income when it goes into your pocket. Employee pays personal income tax on this salary.

Thereafter the company pays company income tax on its income. The owner of the company is thus taxed for income even if he does not draw a salary. There is no escaping the claws of the tax authority when it comes to income tax.

In this forum, we are mostly shareholders of listed companies. We are the owners of the companies even if we only own 1 share. We contribute to the tax accordingly.
When the company gets income taxed, we are also contributing our share to this tax. E.g. a company has 100 shares and 100 shareholders each holding 1 share each. Hence an income tax of $100 means each shareholder contributed $1 to nation building that year (excluding other commitments).
If not for the company income tax, the money would have stayed in the company or even be dished out to shareholders as dividends (subject to tax if it had not been taxed), so that has an impact.

So I am asking you guys, do you ever think of your contributions to nation building through shareholdings of companies (listed or not).

I did a quick calculation on my portfolio. The amount I contributed to nation building through listed company income tax in the recent year is several times more than my personal income tax. I am not really complaining but quite surprised at the amount and I had never thought about this before. I am very sure I am a typical valuebuddie with a typical shares portfolio size/value.

[weijian]

Hi Mushy,

As the saying goes - Give to Caesar what belongs to Caesar.

Besides personal income tax (salaried) and company taxes (through the ownership of shares), there are still many forms of nation building through monetary means - For sure, you cannot exclude the consumption tax that was just increased by 100 basis points on 1st Jan this year.

And how about the various stamp duties and levies? It is just in a different name....

[Mushy]

Hi Weijian, I am aware of the various taxes we have to pay be it in Singapore or anywhere. I am not the type of person to whine about paying taxes. I am not even sure what is the gst rate today.
Here I was thinking of our share of company income tax and the amount surprised me when I go and calculate it. I mean, this is there all the time but I never thought about it, that the amount is so much more than personal income tax.

Btw, want to add that the company income tax is not only paid to Singapore authority but the various authorities where the companies do business.

[smallcaps]

very interesting perspective, did a calculation and it is around 2% of market cap for my common portfolio.
my ratio is quite different though, more like 45%:55% for coy:income tax.

[weijian]

Curious and went to check out the actual income for Budget2023.

FY23 estimated income:
Corporate Income Tax: 24.26bil
Personal Income Tax: 16.84bil
Goods and Services Tax 17.38bil

https://www.mof.gov.sg/docs/librariespro...nnexa2.pdf

Since not all tax paying companies are listed companies, so the amount is probably lower if we were to try to compare it to "how much you are getting taxed from your corporate holdings".

So here we have it - the aggregate individual who invests his wealth, is not a miser and earns the median income - is probably paying ~33% of taxes equally via corporate tax of your investments, personal income tax and GST over their lifetime. This is of course, excluding all the levies/COEs/stamp duties.