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?