2/07/2008

Personal Tax cut

Budget Personal tax cut? Singapore government may cut personal tax from 20 to 18% as inflation soars and growth slows, reports Thomson Financial. Feb 6, 2008 By Jonathan Burgos The Singapore government is expected to announce a cut in personal income tax to cushion consumers as inflation accelerates and growth slows this year, analysts said. Finance Minister Tharman Shanmugaratnam is expected to announce the tax cuts when he unveils the budget for the year to March 2009 in parliament on Feb 15.... 'The inflationary consequences of the GST hike have significantly raised costs of living for the lower-income groups,' Kit said. It will be politically difficult for the government to roll back the GST, but Kit believes the budget will introduce a generous one-off package to offset inflation. To do this effectively, the government will have to do more than reduce the personal income tax rate, since fewer than 30 percent of Singaporeans pay income tax, said Tay Hong Beng, executive director for corporate tax at KPMG. Individuals whose annual taxable income is less than 20,000 dollars are not required to pay tax. The government may increase tax reliefs, Tay said. It could, for example, exempt medical bills from the GST. Health care costs rose 6.3 percent last year. I copied the above from www.littlespeck.com My immediate reaction is who will benefit from a tax cut? I will benefit a little. But most of the people suffering from the rising prices are not going to benefit from a tax cut as Kit had pointed out in the above article. What is needed is to bring down the rising costs of things and services that are within the control of the govt. The things that will affect the bulk of the population at the lower income end, food and essential services, must be looked at seriously. And the regressive GST that taxed more on the lower income group, is not helping the poorer people. All the handouts are a one off thing. When are we going to stop taxing on the poor so heavily?

4 comments:

troop-miner said...

Tax cuts are one-off and you get it at the end of the fiscal year. Good prices can be rising on a daily basis. Your cash flow can be a daily, weekly or monthly concern.

And, a majority of the lower income group do not pay income taxes, as indicated.

All this is just to show that the government appears to be doing something meaningful.

redbean said...

poor buggers!

Anonymous said...

Tax cuts are to help the rich buggers just as GST increases is to help the poor buggers. Everyone gets help and everyone is going to be very happy. More good years lah!

redbean said...

that's a good new year message.