“Nothing is certain except death and taxes” sagely spoke the great economist JM Keynes. Here, nothing is certain except a government hellbent on both collecting taxes and protecting the privileges of the rich.
I am talking of the go-ahead for on-line gambling, which was at the end of the day a fait accompli. The name of the game is fiscal sustainability or rather the threat to the figleaf of a low tax business friendly regime.
Ageing population require greater social spending, for example healthcare spending projected to rise to $12 Billion by 2020. Yet the government refused to do any of the most obvious options:
- Increase taxes on the rich,
- Re-allocate spending priorities e.g. from defense and heaven forbid exorbitant ministers and senior civil servant salaries,
- Adjust the constitutional spending rule to increase the amount of funds available from the reserves, after inflation adjustment.
No, the government refused to do any of those because the first two…. well they won’t want to encroach on the privileges of the rich when they themselves are rich and who wants to vote for a reduction in their own salaries, right?
The third has long ago become an end rather then a means to an end – hence it (the reserves) has taken a life of its own. Besides it is always useful kept in the back pocket in case more vote buying oops targeted spending is required.
What is left but to increase stuff like GST and taxes on vice? Hence on-line gambling comes handy.
It won’t be enough so in time to come other vice taxes perhaps like legalised prostitution. So don’t be surprised if a certain area in Singapore becomes a must-go for ogling at and engaging the services of scantily clad women and not quite women plying their trade behind large windows just like Amsterdam.
It might become a famous tourist spot also just like Amsterdam. While at it add in the “brown cafes” serving legalised pot, it’s supposed to be medicinal these days.
Make no mistake though ………. this government is running short of revenues. Its low tax, business friendly regime is predicated on fast economic growth (guess why the influx of foreign workers) and will come under pressure with the new normal of no more than two to three percent a year.
This article was first published on Chris Kuan’s Facebook.