WORKERS AGED 55 YEARS AND ABOVE (Tax relief)

Mr Chia Shi Teck asked the Minister for Finance if he will consider granting a higher personal relief or a lower tax burden to workers who are 55 years of age and above and still working.

Dr Richard Hu Tsu Tau: The Member has asked for higher tax relief or lower tax burden for workers aged 55 and above.

There is no need to revise the tax relief. With the GST-related tax changes taking effect from Year of Assessment 1994, around 75 per cent of the individual taxpayers will no longer pay any income tax. In the past, a worker aged above 55 would only need to pay income tax if his annual income exceeded $5,700. This income threshold will now be increased to about $23,000.

It is true that in line with their lower statutory contributions to CPF, the tax deduction enjoyed by those aged above 55 on their CPF contributions will be correspondingly lower. This is however partly offset by the higher earned income relief for those aged above 55. The earned income relief is $3,000 for those aged above 55 to 60 and $4,000 for those aged above 60. The higher earned income relief is given to encourage the elderly to remain in the workforce.