By Leong Sze Hian
I refer to the article “Progressivity ‘not for its own sake’” (Straits Times, Mar 8).
Tax system helps Singaporeans have better lives?
It states that “The true test of Singapore’s tax system is not how progressive it looks, but how it actually helps Singaporeans have better lives”.
“Taxes” that are Uniquely Singapore?
I think the problem with the debate as to whether lower and middle-income Singaporeans pay relatively less taxes and get more benefits in return, may be that Singapore may arguably be unique in some of the ways in which we define taxes, or rather what are not taxes, and what constitutes benefits, compared to other countries.
CPF tax?
For example, paying just 2.5 per cent interest on the CPF Ordinary Account, may be considered as the mother of all taxes, since historically, some of our CPF funds may have contributed to Temasek’s 17 per cent per annum returns in the last 33 years, and the Government Investment Government’s (GIC) about six per cent per annum returns in US$ over the last 20 years or so.
Are there any other countries in the world that pay such a low interest on the people’s pension funds?
HDB tax?
Which other countries in the world makes so much money on its public housing by linking ever rising prices to market prices, instead of the costs of building them?
Is this not like another “indirect’ tax on Singaporeans?
Healthcare tax?
With public healthcare spending at about 1.6 per cent of GDP in the previous fiscal year, which is one of the lowest in the world, isn’t the about 60 plus per cent of private healthcare spending against the 30 plus per cent of public healthcare spending, in an environment of relentless rising healthcare costs, like another ‘indirect” tax?
Other advanced countries may appear to have higher taxes, but the “indirect” taxes described above, would be absent or have minimal impact on the cash-flows of its citizens.
Benefits that are Uniquely Singapore?
Much of what we count as benefits may not be so, in other countries.
Healthcare subsidies?
For example, how can our up to 80 per cent healthcare subsidies be a benefit, when the lower-income end up paying our so called “subsidised” healthcare fees that are even higher than Hong Kong and Malaysia’s “unsubsidised” public healthcare fees?
HDB subsidies?
How can HDB housing grants be a benefit, when the prices of HDB flats invariably rise more than the increase in the grants over the years?
Property tax progressivity?
As to “While the Budget announced last month increased the progressivity of the tax system by raising taxes on the wealthy on property”, is it not somewhat contradictory in progressivity, to have raised the property tax of 3-room HDB flats arguably, by as much as 222 per cent. (“HDB rentals up 10%, but property tax up 118%?“, Nov 27)
CPF Medisave top-ups are benefits?
How can CPF Medisave top-ups be counted as a benefit, when most of it may be consumed by rising healthcare costs? In other countries, healthcare affordability may be maintained such that there may be no need for “top-ups”.
Better lives = world’s unhappiest people?
Perhaps a good indicator of “The true test of Singapore’s tax system is not how progressive it looks, but how it actually helps Singaporeans have better lives”, is the article “Singaporeans unhappiest people in the world: poll” (xinmsn News, Dec 20), which said that “So apparently we’re not just “emotionless”, we’re the world’s unhappiest lot as well”.
Raising incomes is best strategy?
With regard to the article “Best aid strategy for middle-income is rising incomes: DPM” (Straits Times, Mar 8), this consistent rhetoric over the years don’t seem to match the statistics that the estimated real median wage growth per annum in the 1990s was about 16 times more than the last 12 years or so. (“Real wage growth p.a. in 1990s was 16 times more than last 12 years?“, Mar 5)
Reduce charges is “benefits”?
As to “would save $730 from tax rebates and $530 through special transfers and other changes, such as a reduction in the maid levy”, since the maid levy is like a tax, how can lowering it for certain families be counted as a benefit? Like this, we can keep increasing all kinds of charges and taxes, and then when we reduce them – count them as benefits – benefits may then appear to be rising all the time!
