Higher Taxes in This Year’s Budget?

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Rumors have been abounding that goods and services tax (GST) will be raised when the yearly budget is released on February 19. However, in all likelihood, other taxes will be raised as well. Due to the rising costs of healthcare and retirement because of a quickly aging population, the government is in need of higher taxes from other sectors.

For example, just like other Southeast Asian countries, Singapore is now dealing with how to regulate taxes on online establishments, in comparison with taxation on actual retail stores. Maybank Kim Eng Research senior economist, Chua Hak Bin, says that Singapore needs to act on this quickly, since increasing goods and services tax would increase the advantages online retailers have over brick and mortar stores even further.

An economist from United Overseas Bank Ltd. in Singapore, Francis Tan, agrees with the need for taxes on online stores, considering that the number of Singapore’s online shoppers grows by double digits yearly. Indranee Rajah, Senior Minister of State for Law and Finance, has said that the law concerning taxes on online shopping is overdue, since online shopping habits are changing rapidly. At present, if online purchases are less than S$400, these purchases are tax-free.

The second sector that may see an increase in taxes is estate tax. While taxes on the assets of people who passed away after February 15, 2008, were removed, these estate taxes might still be reinstated, according to the head of economics and strategy at Mizuho Bank Ltd., Vishnu Varathan. This is because this particular tax is in sync with the government’s push toward making sure all fees are equitable, as well as broadening the tax base.

Aside from a levy on online stores and estate tax, the government may yet increase corporate and personal income taxes. Singaporeans currently enjoy income tax rates that are among the lowest around the globe. With only 22 percent income taxes on the highest wage earners in the country, this rate is relatively low, when compared to 34 to 36 percent in Europe, Latin America, and North America, as well as 30 to 34 percent for the rest of Asia. It’s possible that Singapore’s taxes will increase without lowering competitiveness.

The country also ranks number two in the World Bank’s category of  ease-of-doing business index. It is also number seven in the sub-category of“paying taxes,” three slots ahead of Hong Kong, the country’s competitor.

However, as the US lowers its own tax rates, and with global tax competition on the rise, higher income and corporate taxes are still uncertain. “There is increasing competition in the global arena. We must continue to develop and strengthen our competitive advantages, by maintaining our pro-business environment and building on our connectivity to the global markets and our strong links” to Southeast Asia and Asian economies, said Finance Minister Heng Swee Keat.

Mr. Heng has been silent on whether corporate or personal income taxes will be raised.

The fourth sector that may see a rise in taxes this year is digital currency. The managing director of the Monetary Authority, Ravi Menon, has only said so far that government regulations on cryptocurrencies are currently related to illegal financing, warning that these currencies do carry an investment risk. Other agencies are looking toward how to impose taxes on these digital currencies.  A partner and financial services tax leader at Ernst & Young Solutions, Amy Ang, says that the Inland Revenue Authority must determine whether cryptocurrencies should be considered a commodity to be taxed or a commodity derivative, “given the proposed statutory definition that it is a digital representation of value where the underlying asset is a virtual commodity.”

42 COMMENTS

  1. Very bad of them to increase GST because it taxes the lower income more because the lower income people spend a higher portion of the income. They should increase the property tax of second and subsequent properties of residents and businesses because these properties are more for investment of excess wealth

  2. Another wayang article to justify that they need to raise tax! Increase GST is pro business? Sky high rental is pro business? Lowest personal and corporate tax in the region??!!! We are taxed the highest in the region!!! All those indirect tax like GST, COE, ERP and CPF together with personal and corporate tax rate, thru have the cheek to say we have the lowest tax in the region. What a sad joke!!!!

    • Levies are supposed to protect Locals’ jobs, by making lower salaries payable to foreign workers not so cheap after adding in the levy amount.
      Now more % of foreigners are being employed in SG than Locals
      – unbelievable & unnatural in the civilised history of mankind.
      So why should employers pay levies?

    • Have the same thought as yours’ !!! Screw them WTG , sg have the lowest tax?? ! keep increasing direct and indirect taxes year in year out and keep propagandizing sg have the lowest taxes imposed upon them ! nahbeh! wonder why the bloody WTG not mention the benefits given out at national level to their citizens of those higher tax countries ??? to hell with this WTG! do right do good do together come 2019 , do right at the ballot box!!!

    • Skilled FT commands low levy. Unskilled workers command higher levies.
      That means Govt is encouraging skilled FT to be employed. Without levies, many companies and families will be employing outsiders to do the work and in the end many Locals will be unemployed.
      But how to answer the present phenomenon, whereby many Local PMET are now jobless – jobs taken over by FT?
      Does it mean that preference is still for FT, after taking into consideration the extra levies?
      Which countries in this world have such kind of happenings?

    • Coz the hiring managers are also FTs. So they will hire their own pple over locals. New citizens, pls help us put such insane practice to a stop as you are in the same boat as us and your kids will suffer like us if the whites carry on their insane policies to enrich themselves at our expense.

  3. Really no logic. It has been decades since the advocation and implementation of “pro-business” “pro-connectivity” and what not leading to massive influx of fts here. So what has all these “pro” done to help us ?? Obviously not achieving its objectives. So why still flogging a very dead horse ??

    • If immigrant population is growing like crazy but tax base is not expanding, it shows the useless govt is blindly bringing in poor quality immigrants to plunder from SG.

    • Why tax base is reducing? Many companies are not doing well. More and more people are earning less. Still want to bring FT who can’t help boost the economy? What economics is that you keep letting people in but revenue not increasing nor creating jobs?

    • Their policy is clearly to import foreigners (even scraping the garbage bins for cheap dodgy trash) to feed the property market and they do this even when they know locals will be displaced from their jobs.

  4. All these are silly excuses to increase taxes and why the estate duty was removed in the first place n now implementing it again. Ask yourself why removed it b4 LKY passing and now this tax come back again. All these are wayang show.

  5. Do we not have a large surplus?
    Raising taxes under these circumstances is a sign of panic.
    The government should reconsider as this will put off the foreign investors who will feel insecure with a weak government.

  6. No point KPKB just Leelax and take the poison medicine and enjoy the Swiss standard of living…do more exercise collecting cardboard, cleaning toilets, and clearing/cleaning tables at hawkers centre!!! Or sing, and sell tissue paper at MRT stations reserved specifically for beloved sickarpoorean!!!

  7. Next election, estimate in 2020
    if increase GST to 9/10%
    Many will curse and swear

    But during election year
    Again give out “CARROTS ”
    I bet MANY will forget the bitterness they suffered from 2018 onwards

  8. The majority 70% Sickarpoorean ask for it. Use the wp hammered to HanTum their own head!!!hahaha but unfortunately the 30% got no choice also kena HanTum!!! hehehe!!!

  9. The same old wayang way of justification:
    1) Ageing population lead to rising healthcare and retirement 2) Long time never been adjust or increase, so need to increase 3) Creating awareness

  10. How many citizens are getting handsome bonus? Largely it’s gone. Good enough if you get 13th month. Even luckier if you hold to your job. Given this situation, would any wise government increase tax? This guys are going to ruin the whole country, just as they ruined MRT. Sinkaporeans are likely to pay heavy price for their stupidity.

  11. The easiest way to fix a failing economy is to increase direct and indirect taxes. They say the additional tax is because of an aging population. Population will age and what has it got to do with taxes. We have all paid of our medical expenses forward when we contribute to CPF Medisave, we have all been covered with insurance. If we get 100% susidy than I will say go ahead and increase taxes. But that is not the case. These dumb ass is try to pull a fast one. Reduce Ministers pay will surely not require further increase in taxes.

  12. Progress is important to keep up with competition but when it is done at the expense of many who cannot cope and keep up, who don’t enjoy any benefits of wealth growth and to see this as a sacrifice the nation has to make is immoral and criminal. Gain in wealth must not bring about the loss of humanity and more suffering for the poor and destitutes.

  13. This joker really has no brain or silly,. How can a finance minister overlook all these taxes and yet claim that we are paying the lowest tax in the region. Really an ass-hole.

  14. Global Competition Vs Higher Taxation.

    Global competition Vs Global protection Fee

    Global Competition Vs Global Alternative Resources.

    Global Protection Fee Vs Outsource Global Alternative.

    Higher Taxation Vs Bad Global Alternative

    Where do you think went wrong?

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