SINGAPORE – Singapore will continue to review wealth tax, Second Finance Minister Indranee Rajah said in parliament on Monday (November 1st), noting that the republic is constantly looking for ways to supplement its income in ways that do the right thing Balance.
She stressed that the question had never been whether the country wanted to tax wealth, but the practical question was how this could be done effectively so that such taxes could not be easily avoided.
Ms. Indranee replied to Labor Party MP Jamus Lim (Sengkang GRC) who had filed a motion for taxation for a dynamic and fair economy in the 21st century.
In his speech, Associate Professor Lim spoke about wealth taxes and suggested introducing a tax of between 0.5 and 2 percent on those with net worth more than $ 10 million.
He also suggested that Singapore should move away from the notion that low taxes are the main competitive advantage for Singapore’s status as a financial center.
In response, the minister said tax rates cannot be fully discounted, pointing out that wealth and talent – both Singaporean and foreign – are mobile.
“We need to tax competitively and allow people and businesses to generate revenue to encourage them to stay, and that revenue can be used, allocated and redistributed,” Ms. Indranee said.
She noted that Singapore has continuously increased and improved its income taxes. It also taxes wealth and increases wealth-related taxes such as property tax, stamp duty, and additional registration fees for higher-value cars or home ownership.
What counts, she said, is no longer types of property taxes, but rather a tax policy that works in the context of any legal system.
For example, Switzerland has wealth tax, inheritance tax and wealth-related tax, and its wealth tax revenue is around 1.9 percent of gross domestic product (GDP). This is comparable to Singapore’s wealth tax revenue of around 1.8 percent of GDP, she said.
In her speech, she said Singapore has one of the most advanced tax and transfer systems in the world that not only increases revenue, but also keeps the economy dynamic, building an inclusive society and enabling a greener future.
Almost half of the country’s workers do not have to pay income tax, and of those who do pay, the top 10 percent of individuals make up about 80 percent of total revenues, she pointed out.
“If we look at the whole system of taxes and transfers, a Singaporean household in the middle receives about double the benefits for every dollar in taxes. Lower-income households get even more – about $ 4 in benefits for every dollar “paid,” Ms. Indranee explained.