Is a GST hike the only solution?


The Singapore government seems to have concluded that only way to decrease income and corporate taxes while increasing funding for social assistance to help the poor is through a GST hike. Although I have no doubt that the Ministry of Finance and the Cabinet went through much deliberation before arriving at this conclusion, it seems to be a less-than-ideal solution to helping the poor, for the reasons I explained in Part I and Part II of this series.

But if the GST isn’t increased, how are we going to find the money to “tilt the balance in favour of the poor”? I explore a few possible alternatives, and I invite readers to comment on them and add their suggestions.

1. Use the capital gains from Net Investment Income (NII)

Currently, the Constitution defines Net Investment Income (NII) as the dividends and interest earned from investing past reserves. Just before announcing the GST hike, PM Lee announced that the government will amend the Constitution and seek the President’s approval to re-define NII to include capital gains.

The NII for this year is projected to be almost $2.4 billion. Citigroup economist Chua Hak Bin told TODAY (15 November) that he “won’t be surprised if the NII doubles once you incorporate capital gains”.

This could mean an additional $2.4 billion into the government coffers — almost 60 per cent more than the extra $1.5 billion that the GST hike is expected to reap. It is almost 3 times the entire operating expenditure of the Ministry of Community Development, Youth and Sports in 2005. Is $2.4 not enough to help the needy?

2. Further increase vice taxes

Although smokers know that each budget speech usually brings bad news for them, they may not be aware that Singapore actually has a lower cigarette tax burden than many other developed countries. In Denmark, Ireland, the UK and Portugal, the cigarette tax is upwards of 80 per cent, while in Singapore it is just over 50 per cent. [Note: These were 1999 figures. The cigarette tax has probably gone up across the board since then.]

Cigarette taxation has been proven to be one of the most effective ways of preventing young people from picking up the habit and helping smokers kick the habit by making cigarettes less affordable.

There is also scope to increase liquor duties further, especially for hard liquor. The Singapore Armed Forces (SAF) should also abandon its provision of duty free beer to servicemen.

In the same vein, betting taxes on 4-D, Toto, Singapore Sweep, soccer betting, private lotteries and fruit machines in private clubs should also be increased to discourage people from gambling away their family money.

The annual revenue gain from the 2005 increase in tobacco duties was about $158 million. Similarly, the increase in liquor duties in 2003 resulted in an annual revenue gain of $9.4 million.

Given the benefits of vice taxation to Singaporeans’ health, the savings on healthcare and social service expenditure, the reduction in drink driving and the increase in government revenue, there is no reason why Singapore should not aim to top the world with its taxation on vices.

3. Collect more taxes from tourists

Currently, just 1 per cent cess tax is levied on cessable items sold by tourist hotels, tourist food establishments and tourist public houses. Cessable items include hotel rooms charges, food and beverage, corkage charges and cigarettes sold at hotels.

Cess could be increased to at least 3 per cent or more. In addition the number of cessable items could also be increased to include telephone and Internet charges, the hire of vehicles, tour guide charges and services of dance hostesses (yes, the last item is currently non-cessable!).

The government collected $30.46 million in cess last year. A threefold increase in cess could therefore net an additional $60 million, even without factoring in the increase in tourist arrivals envisaged in the coming years.

Currently, tourists may claim a refund of the GST paid on their purchases under the Tourist Tax Refund Scheme. The government should also eliminate this scheme. Although GST refund schemes are practiced by several other countries, there is no pragmatic reason for Singapore to follow suit. Canada recently announced that it will end its GST refund programme next April.

Some may argue that these moves could discourage tourists from coming to Singapore. But isn’t the main benefit of tourists the money they bring? If some el cheapo tourists were to really shun Singapore because of excessive cess or no GST refunds, then I don’t think they are the kind of tourists we should be courting.

4. Impose a luxury tax

A luxury tax is any tax on the sale of items not considered to be essential to a reasonable standard of living. Items such as high-end cars, fine dining and expensive entertainment could be subject to this tax. Compared to income tax, this would be a fairer way of taxing the rich, yet not penalising those who work hard but are prudent in their spending on luxuries.

5. Stop giving election handouts in cash

On the eve of the last two elections, the government saw it fit to disburse a total of $7.8 billion in cash to Singaporeans through New Singapore Shares (NSS), the Progress Package and Economic Restructuring Shares (ERS). Although less well-off Singaporeans were given larger packages, high income earners still received at least $200 to $400.

Several ruling party MPs had questioned the fiscal prudence of this generous give-away. For the rich, a few hundred dollars did not make much of an impact on either their bank books or their voting patterns. A friend of mine who is a successful investor in the financial services sector even asked me last month, “What is the Progress Package?”

These handouts were given in the form of cash deposits in one’s bank account or CPF account. Although they were meant to cushion the impact of economic restructuring, many less frugal Singaporeans saw it as ang pow money to be spent immediately on luxuries. The longer-than-usual queues at ATMs all over town and the extra long store hours in Orchard Road on the day the Progress Package was disbursed were suggestive of where many “struggling” Singaporeans had spent this money.

The government should have been more prudent in this respect. The money should not have been wasted on giving to the rich, who have no need for cash assistance from the government. It would have been better if it spread out and given in the form of vouchers for essential items rather than in one lump sum cash payment. This would have ensured that the money was not frivolously spent.

6. Reduce government administration expenditure

The government wants to reduce the tax burden for the rich (including MNCs) so they won’t pack up and leave. However it will be impossible to increase revenue without taxing the rich more, either directly or indirectly. This is because most of the tax burden in Singapore already falls on them. If the government wants more money to spend but does not want to make life more expensive for the rich, the best solution would be to reduce on government administration expenditure.

This is not a new
proposal, and indeed the government has already set up a Cut Waste Panel to look into this matter. The Panel has received almost 3,700 suggestions from the public but has agreed to implement just 91 of them – a 2 per cent take-up rate. For the remaining suggestions, government ministries have claimed that they are either already being done or “have been addressed in current policy/practice”.

Assuming that most Singaporeans who wrote in to the Cut Waste Panel had genuine observations and concerns, it is surprising that only 91 suggestions were deemed implementable.

One of the most politically contentious issues is salaries. Manpower costs make up the largest component of government administration expenditure.

Even if one were to completely accept the government’s anti-corruption and talent retention arguments for paying our ministers and top civil servants the highest public sector salaries in the world, is it really necessary to pay them so much more than their counterparts in the richest countries? (The Singapore President earns 3.7 times more than the US President, and the Singapore Prime Minister earns 6.4 times more than the British PM.)

Recently Minister in charge of the civil service Teo Chee Hean said that civil service salaries would rise next year in order to retain talent. Senior Minister Goh Chok Tong also hinted at a rise in ministerial salaries. KTM has pointed out that increasing the Staff Grade salary benchmark will mean that the salaries of the hundreds of Superscale officers will increase. This would cost taxpayers millions of dollars, on top of the already sky high salaries that the ministers and top civil servants earn.

Is this really the most effective way to retain talent and prevent corruption? Human resource practitioners know that salary is not the most important reason why talented employees stay on the job. In fact, a high salary often succeeds in retaining non-performers while having a marginal influence on retaining talent. Having previously worked in the civil service, I know that there are many other reasons besides salaries that result in such a high turnover rate. The government cannot keep throwing money at a problem without solving the root cause.

And if exceedingly high pay can prevent corruption, why is it that so many African dictators continue accepting bribes even when they already have billions stashed away in Swiss bank accounts? Greed knows no boundaries. The Singapore Civil Service has managed to stay relatively corruption-free not because of its very high salaries, but because of the very heavy penalties imposed on offenders.

20 thoughts on “Is a GST hike the only solution?”

  1. Thank you for the writeup, seems to be well thought out.

    One alternative view I would provide is that GST as a means to help the needy is just a ruse. If you’ve noticed, the direction has seemed to move from “helping the really poor” to “helping the poor and the middle income”. For all the hoo-haa, the government may have planned to raise the GST all along. Justifying it in a simplistic format is just a method to try and move on with the issue/to see and then react to people’s reactions.

    As for increasing minister’s income salaries, perhaps the extremely flawed argument by the ruling party serves that as well – they just want a raise. I think by now, it may be clear that the MPs are polarized already – select a number of more favorable talents which generally agree with you more and implement more than craft policies, and you have a unspoken self-selection of characters and personalities.

  2. In reply to your comments on the corrupt leaders,they feel justified and that it is their imperial right. Further, all their salaries are kept low,which gives incentives for them to consider it their moral right, go ask any policeman in the top 10 corrupt countries.

    In Singapore, it is a combination of high pay( which diallows the lame excuse of not having enough) and enforcement of those penalties.
    In regards to the ministers pay & civil service, etc, a review needs to be done but objectively.

  3. Thanks for your comments. I’d just like to clarify that my post was not meant to be a polemic against high ministerial pay. That is a complicated issue and a subject of perhaps a future post.

    I was looking at it in terms of the salaries of all public servants, including Superscale officers and Ministers. Since salaries make up the largest part of govt admin costs, we can’t just ignore it and start counting the cost of say, stationery used in govt offices.

    thor – I think you’re right. PM’s announcement of the GST hike sans details of the offset package was either (1) a political faux pas or (2) a strategy to gauge ground reaction before Budget 2007.

    But I’d add another “direction” that I’ve noticed. I think SM Goh said that the GST hike may be staggered. If the economy does well, and poor people’s pay rises, then there may not be a need to hike GST to pay for social assistance. That seems to contradict PM Lee’s stand that we better hike it now while the economy is doing well. I don’t know if the govt is now trying to back down without appearing to be responding to public pressure.

    Wang – you’re right. I’ve been to at least 3 of the most corrupt countries. There is a sense of entitlement among the corrupt leaders. They think their country is their own personal playground. This is especially so when they have led the liberation war and are now in power.

    How do you suggest we review the minister’s pay objectively when all of us are interested parties? Maybe get some consultants from Mercer?

  4. In the long term interest of Singapore, I think the govt should seriously consider implementing tiered GST. GST cannot be increased indefinitely so as to reduce personal/corporate taxes in response to what other countries are doing to remain competitive.

    At 7% across the board is already creating quite a stir among the citizens, one can imagine what it would be like at 10%, 15% or 20%.

    I think a 3-tier GST may be better for the long run. We have Essentials, Discretionary and Luxury items at different rates such as 3%, 7% and 10% respectively.

    Items such as rice, cooking oil, etc. are taxed very little, say 3%.

    Items such as TVs, air-cons, car below 1600cc, are considered discretionary and taxed at 7%.

    Items such as cars above 1600cc, cigarettes, country clubs, are considered luxury items and taxed at 10%.

    Such a system provide flexibility in adjusting both the items in each group and the tax rates for each group.

    Of course, there will be increase in cost in administering such a GST system but I think it will a more equitable system especially it will reduce the amount of indirect taxes paid by the less well-off citizens for essential items.

  5. Hi Yamasam,

    Youre suggestion isn’t very feasable since they were already unwilling to omit basic neccesities from GST due people finding loopholes in the system as well as high admininistrative costs.

    3 tiered GST would work well in theory but I doubt they would ever do it.

  6. I noticed that everyone had forgotten that the casinos are supposed to bring in great revenues for the govt.

    Why no-one remember it?

  7. Another source of revenue is to raise environmental taxes, particularly carbon taxes. This will also allow us to do our part in mitigating global climate change.

  8. gerald – my guess is that during budget next year, the hike will be 1%. It’s been planned that way already, the purpose of announcing it at 7% is to “soften” the impact later. Let’s see if I’m right.

  9. Yamasam – Interesting suggestion. But I would be concerned about the administrative costs both for the govt as well as retailers. But I can imagine bookkeepers and retail software developers might probably benefit from more business.

    Anonymous – I mentioned taxing gambling more. The casinos will bring in the revenues, but I believe the social and law-and-order costs will outweigh it. In any case, we will probably have the lowest casino taxes in the world cos the govt was so desperate to attract casino operators they dangled the bait of low taxes.

    george – Great suggestion about the carbon taxes. Now that we’re acceding to the Kyoto Protocol, does anyone know if there will be any carbon taxes imposed? I would support that.

    thor – I think your guess is right. I’m just curious: Since Tharman said no fee hikes for 1 year after GST hike, does it mean that cigarettes and liquor will escape fee hikes for a second year running?

  10. I’m not sure if cigarette & liquor might escape the hikes. It’s a bit hard to say – I think Tharman referred that governmental fee hikes will not take place, and that includes public school fees, car park fees, etc. Cigarette & liquor taxes don’t seem to be in the list.

    It might be possible to expect hikes in such governmental fees the following year though (2008).

  11. Hi Gerald,

    The other thing we can do is to provide a monthly GST refund to all citizen and residence equivalent to what a, say person earning $1200 (or whatever) would have spend. This is so that they effectively pays no GST while the refund means nothing to the big spender.

    Perhaps there should be a reverse auction as well among PAP MP :-)
    See who is willing to accept the lowest salary and yet committ to achieving the same set of target. The lowest bidder gets the job, in the truly form of competition :-)

    Honestly, I think UK PM is underpaid, and that is why he is desperate to take up freebies from his rich and famous friends. Also, his wife is busy giving talks (capitalising on her status as first lady) to earn money. Some of what they do is bordering corruption.

    US President, you can’t compare that way as there are far more perks to US President. I think a single flight of air force one will cost more several times more than 1 year SG Prime minister salary!

    Corruption is prevented when there is comfortable amount of income. Paying minister $700k will not make them more corrupt than paying the $1m. Again, in the name of Singapore Inc, cost cutting is in order :-)

  12. I find it true that there are many other ways. Why does the PM and 81 other PAPies think only of this line?? It is Group think at the highest level and I worry for Singapore’s future when PM Lee Says so and it is so, and there is no parliamentary debate on the pros and cons, views on the ground and parliarment ended abruptly after the announcement and it suddenly becomes the rule on earth. And today hongkong has announced the scraping of GST and we are still implementing it, full steam ahead because a handful of people in cabinet says it is the best?? I really think there is more democracy in post China Hongkong than it is in singapore. PM Lee knows what is best for us….does he?

  13. thor – haha…probably double hikes in 2008. I don’t think any goondoo fell for that trick.

    casper – I think rebates and vouchers are more easily administered than different GST for different items. But I don’t think rebates should be given in cash. It should be in the form of vouchers for essential items and services.

    About perks, yes I think our govt is more frugal than most other govts in terms of non-salary perks for public servants.

    Again, I’m not arguing for them to be paid peanuts (no not the $600K peanuts). I think they should be well paid, but within limits.

    sad man – I see your point. PM cleverly chose to make his announcement on the last day of the sitting of parliament. Parliament wasn’t adjourned because of his announcement. I expect the MPs are now doing their research and in the next sitting of Parliament, they will be tabling their questions about the GST. But don’t expect any fireworks. They are from the same party, remember?

    Thanks for mentioning about the HK GST. I should go read up on that news.

  14. i not sure whether i read this on your blog or from another…another unpublished reason for the GST hike:

    HK announced their plans to implement GST because they wanted to remain competitive and reduce corporate taxes.

    Thus, to compete, Singapore also wanted to reduce Corp taxes (and increase GST). Welfare is one of the ways to spend the tax gains, but remaining competitive was a factor.

    Now that HK has removed its plans for GST, and not reducing corp tax, Singapore does not have a compelling reason to reduce Corp taxes too.

    But anyway, typical of Singapore in the past, the easiest solution is always to pass extra costs on to the people. Since we never protest. Those that do, typically migrate. and those that migrate, can be replaced by other nationalities who’d be more than pleased to become Singapore citizens.

    whatever happened to the noble idea of serving the people? sigh…

    Aygee

  15. Hi Aygee,

    By extension of your observation, if S’pore doesn’t have a compelling reason to reduce corp taxes to keep up (or down) with HK, then there is no need to hike the GST as well. My assessment is that the GST hike is not to fund welfare but to increase the tax base further so that corp taxes can be brought down.

    Interesting observation about protesting, migrating and replacing. I think it’s so true!

  16. To increase the GST for social assistance to help the poor? This is just all plain bulls*** from the government. Even if that is true, are you sure the government really need an additional injection of 1.5 billion?

    Just ask yourself a simple question. How much surplus is generated by the Singapore economy now? Are you ABSOLUTELY sure they still need MORE money?

    The government is just like the NKF. Increasing their coffers for no other reasons other than paying their own fat pockets. I cant understand why Singaporeans can be that naive and believed everything that the government says.

    At the end of the day, when everyone forgets that there was a GST hike (like in the past), the government will remove the so called “monetary assistance” to the lower-income group and then these people will suffer. Isnt that common sense? Cant anyone even see that?

  17. Culling the white horse in property taxes: The Odd Imperfection in a 1st world economy.
    I cannot help notice a glaring omission in the proposed SG budget 2007. GST isn’t the only solution and property taxes need urgent review if we are to remain a 1st world economy.

    Here are my basic observations (and their resources).
    1) I believe in “Staying Together, Moving Ahead”- http://www.pap.org.sg/articleview.php?id=589&mode=&cid=25 , I supported that manifesto during the recent election as being human, we have to learn to live together.

    2) All SGporeans are united perform some form of NS as parents, males etc, so ALL should be entitled to affordable space/ resources to grow their dreams. In terms of residences, food and economic opportunities etc.

    3) Increasing the Rich poor divide will only result in social fragmentation, crime, suspicion culminating in demise of SG.
     Land is often a source of social discord/ war.

    4) It is our elected govt’s responsibility to maintain SG [maybe too: the world at large] in a state of sustainable social development/ economy, and efficient land allocation is paramount.

    5) Everything scarce/ ‘remotely evil’ in ‘squeaky clean’ Singapore must thus be rationed to allow access by all (where appropriate), strategic taxes are a way to achieve this: e.g. : income tax, road tax, GST, ERP,
    i) Income tax rates: http://www.mof.gov.sg/taxation/indiv_income_tax_rates.html
    ii) Road tax rates: http://www.onemotoring.com.sg/publish/onemotoring/en/lta_e_services/online_enquiries/road_tax_calculator/road_tax_calculation.html
    iii) Tobacco taxes stand at >64%: http://www.hpb.gov.sg/hpb/default.asp?pg_id=1030#a_keystrategies

    6) The current system of unlimited housing tax concessions is unfair, outdated and unsustainable. At a merely 4% for ANY size of property, it encourages the rich & elitist to speculate/ hoard property at the expense of the majority SGporean: http://www.iras.gov.sg/ESVPortal/pt/pt_d.1.d.6_what+are+the+claims+available+for+residential+properties.asp. And to further the elitist joy: ‘Property Tax haven policy’: another elitist oddity where elites can enjoy S$900K tax exemption: http://forums.hardwarezone.com/showthread.php?t=1512965 (well the existence of estate taxes is another ST forum unanswered: oddity)- Estate duty: Exemption should cover all assets (ST forum: 19.1.07): http://groups.google.com.sg/group/soc.culture.singapore/msg/f258c7cdf9cc2577?hl=en&

    7) If land isn’t a limited commodity in SG then what is? Security spending in SG2006 budget was $12.81b or 41.8% : http://www.mof.gov.sg/budget_2006/expenditure_estimates/attachment/Overview_EE2006.pdf , so should the elite continue to be allowed to hoard/ speculate over vast land areas for a song?

    8) Recently: an HDB flat (govt housing) is getting shockingly expensive and property costs in SG are evading the reach of the common man: due to govt oversight?
    i) A Marine Cres HDB apt (117sq m) is sold for $495K: http://www.hdb.gov.sg/bb33/ispm051p.nsf/Search , http://www.sgforums.com/?action=thread_display&thread_id=236234
    ii) The median gross monthly income of the average Singaporean was $2,170 as at June2006: http://www.todayonline.com/articles/170264.asp
    iii) SLA does little to control speculative rises and land costs; HDB sidesteps the issue of land costs whilst emphasizing how popular HDB flats are :
     Quote: Ms Kee Lay Cheng, Dy Dir, Marketing & Projects, HDB (ST forum 10.1.07) “Mr Leong … has missed the point. To understand the full extent of public-housing subsidy for new HDB flats, one should be comparing the market value of the flats with the sale prices charged by HDB, rather than look at the input costs of land and building… … … …” http://forums.delphiforums.com/n/mb/message.asp?webtag=sammyboymod&msg=129387.1

    9) Proper governance is guided by justice and equality which dictates that progressive taxation forms the backbone of tax policy: http://en.wikipedia.org/wiki/Progressive_tax – . yet it really seems to me that the SG govt ganging up with speculators to profit from land sales: Speculators enjoy low property taxes, gov collects the revenue from expensive land sales. Will HDB eventually breed a population of home debtors? It’s sad when the govt seems so myopic…

    10) GST is a regressive tax that does no favor to the poor. ‘The higher cost of living will hit the poor harder’ http://newpaper.asia1.com.sg/printfriendly/0,4139,122804,00.html and the rich may avoid paying GST on expensive items bought via eBay/ holidays to regional countries etc- methods which the poor have little access.

    11) The gov must honor its manifesto via creating a sustainable platform for the equitable of land distribution in Singapore.

    12) Truth is that land and property are both limited resources and its gov duty to ensure its equitable distribution.
    i) There is also anticipated increased demand for more housing options in SG both by expatriates, FTs as well as Singaporeans who need basic living space to maintain elderly folk, children and other special needs.
     Population is rising: ‘planning for a population of 6.5 million’: http://www.channelnewsasia.com/stories/singaporelocalnews/print/257659/1/.html
     Foreigner get to ‘can rent HDB flats at a lower rate’: http://www.expatsingapore.com/startup/shift.htm , http://www.jtc.gov.sg/products/readybuilt/housing/apt/pages/apartforrent.aspx
     Pte property in demand: Foreign purchases of private residences here hit an all-time high of 4,595 last year http://groups.google.com.sg/group/soc.culture.singapore/msg/a29e9bb01e9032f7?&hl=en

    13) Social disorder?: something tells me that PAP gov has in someway orchestrated this whole ‘dependency programme’ (rooted in the PAP kiasu mentality). To the elite: Land hoarding remains a tax haven and a means of manipulating the poor in society.
    i) It has been reported that the SG govt’s public assistance schemes are complicated and clumsy:
     ‘Another $70m for ComCare: Fund helped 90,000 needy S’poreans in first 18 months, … which disbursed $2.7 million through grassroots leaders…. 5,500 grassroots leaders were also trained to provide interim assistance to families in financial difficulty’ http://www.todayonline.com/articles/170947print.asp yes: SGporeans are so dependent on PAP handouts… but what about making them less debt laden in the first place via proper regulation of land use in SG?
    ii) The Adventures of Elite Girl, …” … please, get out of my elite uncaring face.” (19 Oct, 2006) saga: http://intelligentsingaporean.wordpress.com/wee-shu-min/ , Peanuts: http://en.wikipedia.org/wiki/Tan_Choo_Leng , NKF saga http://app.mof.gov.sg/cutwaste/suggestionview.asp?id=25856
    iii) No democracy in elections: Downsize super GRCs (23Dec2005): http://newpaper.asia1.com.sg/printfriendly/0,4139,99258,00.html?
    iv) Singaporeans can write to CPF Board to appeal for higher Progress Package payout (3.4.06) : Mr Mah explained that while this may not be the best way of measuring their wealth, it is administratively simple: http://sg.news.yahoo.com/060403/5/singapore201170.html
    v) 67,000 Singaporeans fail to sign up for Progress Package payouts: http://www.channelnewsasia.com/stories/singaporelocalnews/view/254970/1/.html
    vi) Singapore’s birth trend outlook remains dismal (7.2.07): http://www.channelnewsasia.com/stories/singaporelocalnews/view/257208/1/.html – bolder changes in family policies are needed to help Singapore replace its rapidly ageing and dwindling population.
    vii) Singaporeans need assurance over growing population: sociologist (9.2.07) Prof: it’s also important that as Singapore attracts more foreigners here, it should also take measures to retain its citizens. http://www.channelnewsasia.com/stories/singaporelocalnews/view/257677/1/.html
    viii) Help middle income workers by relaxing Workfare criteria: unions (9.2.07): “in the pa
    st, even when the income tax was lowered, they had lower CPF as well. That, somehow, did not equal out to more benefits …”: http://www.channelnewsasia.com/stories/singaporelocalnews/view/257618/1/.html
    ix) Social Development Sector comprises six Ministries … accounts for 41.8% govt expenditure in FY06.- http://www.mof.gov.sg/budget_2006/expenditure_overview/social_dev.html
    x) Middle class wage stagnation could lead to social instability (11.1.07) http://www.channelnewsasia.com/stories/singaporelocalnews/view/251939/1/.html
    xi) This is a system based on government taking everything away from the people: http://www.sgforums.com/?action=post_display&post_id=5963404
    xii) SM call to wealthy : Give 0.5% of annual pay to needy: http://singaporecommentary.blogspot.com/

    14) “Staying Together, Moving Ahead”- the ease of implementation and the benefits gained from progressive, ‘individualized’ land/ property taxes are as follows:
    i) Benefits:
     Greater tax contribution by those who can afford, and choose to live luxuriously in our safe and cosmopolitan city (defended and maintained by ALL Singaporeans):
     Greater emphasis on family as prop tax calculations would benefit ‘larger gps under same roof’: i.e. families.
     Better population census as result of people registering their true addresses.
     More equitable distribution of ‘progress packages’ and better targeted social support framework through accurate census information, with consideration that not all private prop dwellers are ‘rich’.
     Improved govt image viz improved government transparency and maturity of govt administration.

    ii) Ease of implementation:
     Each SGporean/ PR/ legal FT etc is allocated an individual property tax allowance/ scale (adapted from income tax scales: http://www.mof.gov.sg/taxation/indiv_income_tax_rates.html).
    All amounts refer to per pax tax burden wrt annual value of property:
    [amounts < $2K]: no tax
    [amounts < $3k]: On the first 2K and next <$1K= [$0 + excess value x 3.5%]
    [amounts < $4k]: On the first 3K and next <$1K = [$35 + excess value x 5.5%]
    [amounts < $8k]: On the first 4K and next <$4K = [$90 + excess value x 8.5%]
    [amounts < $16k]: On the first 8K and next <$8K = [$430 + excess value x 14.0%]
    [amounts < $32k]: On the first 16K and next <$16K = [$1550 + excess value x 17.0%]
    [amounts > $32k]: On the first 32K and next whatever amt = [$4270 + excess value x 20.0%]
    and so forth… (see income tax rate 2007 for the idea: http://www.mof.gov.sg/taxation/indiv_income_tax_rates.html)
     A family of 10 living in a large property of annual value $80K need not be alarmed about property taxes as each person’s allocation will be accumulated: thus the said property of 10 legal inhabitants will yield: $4300 in tax [i.e.: 10x the $<8k category], however if a rich tycoon decides to stay alone in such a property (inefficient land use): then the tax chargeable would be under the >$32k category at $4270 + 48,000 x 20%= $13,870.
     (currently the prop tax is $80,000 x 4%= $3200- for this rather large property)
     Computerized national registry records / elections dept records can easily yield the no. of ‘legal’ inhabitants residing in such quarters. This calc is no more complicated then that for the progress pkg/ income taxes and far more equitable.
     A similar formula can be used for rental/ ‘non-owner occupied’ properties.

    15) UN World Summit for Social Development and beyond: achieving social development for all in a globalizing world (Geneva, 26-30 June 2000) SG professed: “Economic development is undoubtedly necessary to ensure social stability. The thrust of our social development policy is to deploy resources to pre-empt social problems and actively shape the development of our society instead of dealing with them downstream.”- http://www.un.org/socialsummit/speeches/286sin.htm

    16) SG gov has no excuse not to do a good job implementing my suggestion:
    i) They promise a first class living environment as reason to raise GST, http://www.singaporebudget.gov.sg/budget_2007/gst.html#Q1 that being the case then there is urgent need for equitable land use/ distribution in SG.
    ii) They have manpower to check ALL commercial weighing scales in SG: between 04 till current and announce its completion: http://www.channelnewsasia.com/stories/singaporelocalnews/view/257636/1/.html
    iii) SG is an info comm. Hub, no reason why it cannot set an example in govt administration for other countries to follow in the accurate assessment on property taxes: http://www.i2r.a-star.edu.sg

    17) References:
     Singapore is a sick country: … has the fifth highest incidence of kidney failure in the world with about 20.1% Singaporeans suffering from hypertension and 8.2% from diabetes. Cancer is the No. 1 killer in Singapore. Every year, over 8000 cases of cancer are recorded here. http://www.nkfs.org/pc_health_screening.php
     WHITE HORSE “Prior to year 2000, the term ‘white horse’ was used to identify sons of influential persons to ensure such enlistees were not given preferential treatment.” http://www.bigomagazine.com/fooled/whitehorse.html , http://www.newsintercom.org/index.php?itemid=274
     PROPERTY TAX ACT: (CHAPTER 254)- http://statutes.agc.gov.sg/non_version/cgi-bin/cgi_retrieve.pl?actno=REVED-254

    Hoping for a fairer budget and progress for SG. , will appreciate feedback if any info is incorrect. Tkx.
    The ‘Non- elite but caring face’

  18. In view of China’s grow, US is trying to establish greater presence in Asia. maybe we can lease out part of Singapore to US for a few billion dollars per year and they can set up a military base here.

    The additional funds could really come in handy. Also, with a huge US military base in Singapore, we could probably cut back on military spending and stop wasting our precious resources in playing wargames.

    Also,We could cut short the army period and more people wld be able to contribute to the economy by being in the workforce rather than spending time playing combat games and draining taxpayers money.

    Moreover, I think the Marines could be a huge source of revenue for the up coming casino. just look at Las Vegas.

    In addition, such a move might further strengthen ties between US and Singapore. Besides that, imagine the no of inter-racial babies we might be producing. Oh boy, we never won miss universe, ever, this move might actually give us some hope…..

  19. GST UP 2% – Do Government aware lot of items up from 10 to 30% even in Polyclinics and Hospital WHY? No matter how much gst credits we get cannot offset such a hike! If you are sick with high blood pressure plus cancer – Go to Polyclinic the fees is up about 10% but you go the SGH for cancer consultation and blood test the fees is up to 20% as a patient suffered with sickness no matter how work hard you are cannot covered the medical expenses and plus lot of others too. Despite this we cannot get help as we are over the income of $1500 in which for so many yrs can we survive in this high expenses economy? Wonder?

    Patient

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