Can Singapore's limit of individual tax reliefs hit working mothers?

Singapore's Deputy Prime Minister Tharman Shanmugaratnam was asked to explain the rationale behind capping the personal income tax relief, and the implication this has on the Working Mother's Child Relief scheme.

Responding in Parliament, the Minister noted that the current 15 personal income tax reliefs may unduly reduce the taxable income for a number of individuals with high incomes.

"After studying the reliefs being claimed, we decided to limit the total reliefs that one individual can claim to reduce taxable income, in order to preserve the progressivity and fairness of our tax structure," he said.

He added that the relief cap of $80,000 will not affect 99% of tax resident individuals, including a majority of working mothers - adding that 9 out of 10 among those currently claiming the Working Mother’s Child Relief (WMCR) are expected to continue to claim it fully.

"This includes those with more children – slightly over eight in 10 individuals claiming WMCR on two or three children are not expected to be affected by the cap," he explained.

Beyond tax reliefs, he pointed to other government measures for Singaporeans looking to raise kids: Baby Bonus Cash Gift, Child Development Account (CDA), Medisave Grant for Newborns, Foreign Domestic Worker Levy Concession, and the newly introduced CDA First Step.

Earlier this year, a second week of government-paid paternity leave was legislated, applicable to all fathers of citizen children born from 1 Jan 2017, and an increase in Shared Parental Leave from one week to four weeks for citizen children born from 1 July 2017.

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