10/02/2019

Singapore needs a massive revamp of the income tax regime

The poor Singaporeans are the highest taxed individuals in Singapore in nett terms. Though many have been beguiled by the little income tax they are paying, many low income and no income Singaporeans are still subject to the regressive GST, taxing on everything that a Singaporean used and consumed. This is very unhealthy and discriminatory against the poor and low income Singaporeans. At 7% GST, poor Singaporeans, no income Singaporeans and low income Singaporeans are all taxed at 7% of their consumption or expenditure, with no exceptions.

If we were to consider the personal income tax system, with personal reliefs, earned income relief and other reliefs, anyone earning less than $30,000 annual income would practically pay $0 income tax. But this savings in income tax has been swallowed up by the 7% GST which effectively forms the based for personal income tax of everyone, young and old, working or not working.

On paper, any Singaporean earning $20,000 pa would not be subject to any income tax. The tax for the next $10,000 taxable income is $200 at 2%. If all reliefs and deductibles are included, a person earning between $40,000 to $50,000 would be taxed $200.

If the average income of Singaporeans is $3,000 pm, it would mean 50% of Singaporeans would be paying $200 or less in income tax. Maybe 60% would be paying $200 or less.  Imagine how much work and how many people are hired and paid to administer 50-60% of Singaporeans income tax submission and assessment?

Why not change the tax regime for Singaporeans earning $50,000 and below to be exempt from income tax? Why employed an army of tax personnel to monitor and collect $200 from a few of the 2m citizens? So many resources and manpower could be redeployed into more productive areas and a lot of savings in payroll.  After all, with GST, the people are already paying 7% personal tax in another form, and the pool of tax payers includes children, babies and retirees with no income but paying taxes.

The other area of main concern is not to tax indiscriminately, on essential and basic items and on children, education and medical services. These can be fine tuned to tax on the selected items and services. A one size fits all idiotic approach to catch everyone with no exceptions and compassion is negligence and a lazy attitude in public administration. The fine tuning would also make it less expensive for citizens versus foreigners when foreigners are a big part of our population and workforce.

With the uncontrolled and unchallenged lust to increase GST to 9%, the need to think deeply and thoroughly on how this might affect the less able citizens becomes more important. We don't pay millions for slipshod and careless policies that are convenient to apply but indiscriminate in hurting the well beings of the citizens. If there are so many mean people that think means testing is important and necessary, this principle must also apply to indiscriminate increase in GST.  Do the due diligence, put in more effort and think, use the so called million dollar brain or talent to show care for the people, especially those that would be adversely affected. Every dollar counts.

These are just a few thoughts on the need to revamp the tax regime instead of continuing the way it has been for so long. If the CPF can be changed and changed until it turns into not the people's money, for who's interest, why should not the tax regime be changed as well, to benefit the people that need to put up with it?

30 comments:

Anonymous said...

The taxation system in Singapore has been revised, revamped and tweeked several times in the past 50 years. Each time the objective is to tax the masses and unburden the millionaires and billionaires. Even the Estate Duty has been removed! Why?

Answer: very simple and straightforward - ministers and top civil servants are millionaires. The rich takes care of the rich.

jjgg said...

Ah.. rb.. why change a tax regime when yoy IRAS's collection from tax always increase. Good times or bad times.. name one year over the past decade or two where yoy tax receipts have fallen. This is taxation by stealth..no good meh??? VTO!!!

Anonymous said...

Hahaha....

All the issues raised in the article will not affect the next GE results.

Nothing new lah! Tax tax tax!

Many many many many many people will die die die die vote for pap under all circumstances/taxes taxes taxes!

So...pls collect more taxes!

Hahaha....

Anonymous said...

What Kind Of Leaders Does A Nation Need?

1. You need sincer, honest and down-to-earth leaders, not overly smart, calculative and ruthless leaders who lavish in five-star ivory towers high above cloud-9.

2. You need leaders who really sacrifice everything for the masses, not leaders who pretend to sacrifice and demand respect, obedience, untethered power and obscene salary and bonuses.

3. You need leaders who passed laws to protect the masses, not leaders who passed laws to protect themselves.

4. You need leaders who walk the talk, not leaders who talk about someone else's walk.

5. You need leaders who keep their promises to the masses, not leaders who short-change you by tweeking the constitution, laws, rules and regulations.

6. You need leaders who give you the Swiss standards of living, not leaders who give themselves the Swiss standards of living.

7. You need leaders who are young and healthy, not leaders who are old and sickly.

8. You need leaders who really care for you (not just cursory token care to pull wool over your eyes), not leaders who care for themselves and white-horse their children.

9. You need leaders who are altruistic, compassionate, magnanimous and open-minded, not leaders who only care for their dignity, integrity, name and fame, salary and legacy.

10. You need leaders who respect the elders, not leaders who show contempt to even their own father and mother

Anonymous said...

Hi FOG 9.59 am

It is very VERY VERY difficult to find a leader that is 10/10.

But not to worry. We are indeed very VERY VERY fortunate to have very very very good leaders.

So.....they will take best care of you.

Cheers.

Anonymous said...

Sg law is ruthless to the core to low and mid income people. The gov hate low n mid income people.

Anonymous said...

Agree with Anon 10:30 am. Singaporeans have very good leaders in taking best care of them, especially their CPF savings and daily consumptions from cradle to grave.

Anonymous said...

From the Independent:

SPP said: “Pending the release of the report of the EBRC, Singapore People’s Party has not, and does not intend to give up on any of the constituencies it had contested in the last GE.”

The party added: “SPP will work with all political parties when the EBRCR is out to ensure there is a smooth and fair challenge to contest the PAP in its constituencies. In the meantime, SPP will continue to focus on our engagement with residents in these constituencies.”


This is called speaking with fork-tongue, isn't it?


If SPP does not want to concede any constituency it contested in 2015, then it is frivolous to talk about working with other parties.

Anonymous said...

Brandon Lee Bing Xiang, 26, was charged on Oct. 1 with taking illicit videos of at least four women in Yale-NUS College.

This seems to become a hardcore mental illness of undergraduates in Singapore universities.

Has this been factored into the ranking when assessing which are the top universities?

Anonymous said...

@All,

Based on Year Of Assessment 2018:

There were 794,963 individuals with income from $20,001 to $50,000.

Total income tax collected from the above was $183,072,000.

So still worthwhile lah, to collect extra pocket money for gahmen!!

Anonymous said...

Uncle RB, u hv forgotten the PAPies motto being passed down by an old man -- "Wats wrong with collecting more monies from thy people?" To change this motto is really hard, unless you lead the example by VTO them Lor ho boh?

Virgo 49 said...

Dear Mr Frog.

One fine example is President Xi of China.

Just watch their National Day celebrations and how they addressed their own countrymen.

"Comrades hope you are well" to their servicemen and women.

"Comrades acknowledged your hardships of your contributions to the NATION"

Socialists fear by the bananas as commies as compared to whats demo crazy capitalists countries.

See how he interacted with the peasants on the ground.

Our leaders with contingent of bodyguards that fear orr bak kak only seen them during erection times.

Why the Honkies prefer White Men bullshits sabo rule?

Rather than the manovelent so called hyped by the West and bananas brutual rule

Anonymous said...

"What's wrong with collecting more money (for the government)"
- Founding PAP Member

QUESTION
- what kind of values does this animal have?
- always think about taking other people's money

Virgo 49 said...

What's you expect from Kek??

Kek kek?? One cent cuts into now six pieces.

That's why they produced monies grabbers and only thought of monies like WSG.

Pathetic soul.

Anonymous said...

This collecting more money sickness has become incurable and widespread. Just like a cancerous lump of shit, this infectious disease has subtly intruded into the psyche of many normally healthy people.

Ⓜatilah $ingapura⚠️ said...

@ all

It is an economic fact: the less well off you are, the greater the impact of taxes on your economic/ financial life.

GST is a way on increasing (widening) the tax base. i.e. you reduce income/ company taxes---which means the richer you are, the more "choices" you have---and you widen the scope of taxation by imposing a "small rate" over a wide variety of taxable goods AND services...anything that qualifies as an "economic event", where form of "value" are exchanged.

The GST is going up, most probably after the next GE. There is no stopping it.

Moral of story: Do you best to INCREASE your wealth. Being poor might not be a choice, but staying poor IS

I was enjoying the last 2 days chilling out at Robertson & Clark Quays, enjoying the wonderful atmosphere, chilled wine, limoncello, all forms of Mediterranean fare. I remarked to my kaki..."Singapore is the NEW EUROPE lah" 2 of the kakis were in deep discussion about setting up Tranfer Pricing with a famous Singapore tax accountant.

One chap is living in Germany, the EU, the other in Australia. Both are FED UP of paying high taxes in both regies, they've decided to relocate next year and set up their Family Offices here. Why? Because the system (aka the govt) incentivizes such people to do so in very very COMPETITIVE ways, such that they (according to said "famous" accountant) can defer taxes or end up paying ZERO all together.

And so it was a very pleasant and enlightening 2 days hanging out with these gentlemen...😂

My point is REALITY: you have to face up to the REALITIES of life, then choose your paths and actions accordingly. SINGAPORE IS SUCH THAT IF YOU HAVE MEANS, THE SYSTEM WORKS IN YOUR FAVOUR.

So...IMO, you ought to stop bitching and complaining and do whatever you need to INCREASE your economic situation. Whining and complaining won't solve anything---you end up feeling worse and not getting any wealthier. Forget about a "political solution". It won't happen. The govt is FOCUSED on appealing to the "winners" and encouraging them to set up home and shop in Singapore...even if it means screwing the locals a bit more, and hopefully motivating them with "spurs in their behinds" to wake up their fucking ideas, and GET INTO THE GAME.

Got "Majulah Sendiri"? 😛🤑 HUAT AH!💰

Ⓜatilah $ingapura⚠️ said...

How to not only survive but PREVAIL in Singapore:

Be Water, My Friend Adapt, and take action.

Ⓜatilah $ingapura⚠️ said...

@ you Turd Whirled Mentality Fucktards:

Go, Tommy, go go Go!

https://www.straitstimes.com/singapore/tommy-koh-laments-that-singapore-is-a-first-world-country-with-third-world-citizens





Anonymous said...

@ 127pm

U are 1o8% correct!

Cheers.

Anonymous said...

Yesterday, China leader Xi already said " ...没有任何一个国家能够阻挡中国的前进.。" or no countries in this world is able to stop China from moving forward ( jus like Majulah China!) ..China leader could have learnt this from Sinkieland national pledge, similarly the taxes thing the Papies also like to Majulah Sinkingland lah , nothing stands in their way in collecting more monies unless VTO VTO VTO lah.

Anonymous said...

Third world mentality leaders imported more than 2 million third world village folks as new citizens to increase population from 3 million to 5.7 million. Of course, the people naturally are of third world standard. Tommy Cold has been in New York's ivory tower for too long. He has lost touch with the ground. It's time he retires for good and shut the duck up.

Ⓜatilah $ingapura⚠️ said...

@ 358

Don't be to enamored by Xi's rhetoric. Saying some empty bullshit like “No cuntry can stop China!” to a bunch of human-robot soldiers, would be the same in a shit-hole cuntry like the Philippines which has a fraction of China’s per-capita GDP (China ~10k, Pinoy land can’t even make it to 3k).

If Duterte stood in front of similar phalanxes of human-robot Pinoy military and said “No cuntry can stop the Philippines” that carries as much weight and meaninglessness as Xi’s words.

Second point: Singapore’s taxes are WAY BETTER than China!!

The average Singapore worker will be paying more than 1/3rd maybe 45% of his income to the govt, if he was in China. Company rates are 25% (less if you are a “favoured” company). Then there are GST, VAT, sales tax and luxury taxes which make Singapore’s 7% GST a damn fucking GOOD deal.

Singapore? Not so bad lah. In fact, it is quite awesome and very fucking rocking!

You should immediately fall on your knees and thank Lee Kwan Yew lah. Show a bit of gratitude 😆🤣

Ⓜatilah $ingapura⚠️ said...

@ 424

Sorry man, I have to defend Tommy Koh (not that he needs it from some “nobody” on the net). He is one of the nicer guys in the PAP, and is unafraid to give them critical words when it is required.

During his time in the USA, he charmed the pants off the Americans and the other diplomatic corps. He’s a “legend” in the MFA lah, and has served our nation with distinction and honour.

He is, by all accounts a “nice guy”...a rare example of humanity in the PAP.

Anonymous said...

You have got it wrong lah in saying "No cuntry can stop China!" - reading carefully "no countries in this world is able to stop China from moving forward !" Majulah China ! ...the only factor that could stop China from moving forward is China themselves lah & the "ONE" higher up.

Anonymous said...

Not true leh, this guy won't tell the Emperor tat he isn't wear any clothes lest he got into trouble leh.

Anonymous said...

# ..You should immediately fall on your knees and thank Lee Kwan Yew lah. Show a bit of gratitude #
Kindly refer to one oppie guy who said :" ..it's SERVITUDE not GRATITUDE lah"
Don't be blinded by own gratitude to him, it's his duty it's his service to the nation & no need to bow or worship him as he need none of these.

Anonymous said...

@All,

Why the Chinese economy will slow going forward

Good overview of China economy & the big structural challenges it faces.

My feel is that the current China leadership is NOT the most capable to lead forward. But no worries --- with such a large pool of human capital, more capable people over the next 10-20-30 years will rise or be thrust upon to take charge, lead & find solutions.

I have about 15% of my total portfolio invested in China/HK, so I put my blood & sweat money where my mouth is. Unlike 99.999% of people on this blog. LOL!!!

In fact I bought a bit more HK ETFs near the market openings of NYSE last night & HK this morning .... to take advantage of the small knee-jerk sell-off due to the shot protester.

WSG

Anonymous said...

It is very true if only they realised it. No income tax does not mean no tax. That 80% or so of Sinkies does not pay tax is just a 'feel good' slogan to fool the ignorant. GST is an all embracing tax on rich and poor.

As an example, if you spend $1K a month, which is $12K a year, the GST paid directly, as in utility bills, or indirectly (which businesses will add to your bill) the total GST comes to about $850 a year. How much would a low income person need to earn to pay $850 in income tax? And if you are not working or retired, you pay no income tax at all. That also means paying income tax is only a mid term liability of some 40 years or so at most.

But GST is a tax from the day of human conception in the womb to eternity. After death their descendants still continue to pay GST, if they conduct remembrance ceremonies or prayers. Compare that to income tax.

Anonymous said...

The Chinese economy will slow going forward. That has been the experience of every developed nation, democratic or not.

China has a huge reserve pool of well educated human capital and they will find solutions. They have worked through all odds to achieve what they are today. As someone mentioned, bringing a country of 1.4 billion people to achieve a per capita income of around $10,000 is no mean feat.

Many of the developments inside China are not really stolen technology from the West, (eg space station project, moon missions, missile technology, or even the technology to turn deserts into fertile land), because China had long been deprived of involvement in state of the art technological idea development by the Whites.

China had to turn adversity into fruitful results all by it's own ingenuity, and this has made them stronger. The progress made has unsettled the complacent West and that is why the US cannot tolerate being behind in some area of technology like AI and 5G.

China trained and produced, if I am not mistaken, five million engineers a year, enough for internal use, as well as exporting those engineers involved in overseas development all over the world.

Anonymous said...

@Anon 848pm

It's 5M STEM grads, not all are engineers.

Moreover I have to say probably only 2M are 1st world standard.

Just like how S'pore produce a few thousand IT grads each year, but most cannot write software. And need to import from naan & chapati land every year.