Gst 10% soon

[Aaronlkl]

http://www.businesstimes.com.sg/government-economy/singapore-budget-2015/more-tax-hikes-inevitable-but-not-imminent#xtor=CS1-3

More tax hikes 'inevitable, but not imminent' Observers say there is still room to strengthen Singapore's revenue base, whether by taxing more income earners or by raising the GST rate

BUDGET 2015's surprise hike in top personal income tax rates reflects the government's determination to strengthen future revenues, with the next iteration likely to come from higher Goods and Services Tax (GST) - though this may not happen anytime soon, observers have said.

 

Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam had caught economists unawares on Monday with his announcement of an increase in the top marginal rate of personal income tax to 22 per cent from 20 per cent, and smaller adjustments for others in the top five per cent of income earners.

Noting the inevitable increase in government spending in the future, driven largely by health care and infrastructure needs, Mr Tharman had underscored the need to review Singapore's domestic taxes to bolster the country's fiscal position for the long term.

 

"Our philosophy is to keep the burden on the middle-income low, and to target benefits at the most important needs of the poor and middle-income groups ... Hence, we have designed our system such that we have lower overall taxes than most countries, but nevertheless maintain a highly progressive regime," he said, adding that the lower-income group gets significantly more benefits than the taxes they pay.

 

Still, observers told The Business Times that there is room to strengthen Singapore's revenue base - whether by way of higher marginal tax rates for a broader swathe of income earners, or through a rise in the GST rate.

 

After all, they said, calls for greater social spending must come with a new social compact - where a stronger sense of collective responsibility augments the long-held foundation of personal effort. At present, the top 10 per cent of Singapore's taxpayers foot slightly over 80 per cent of personal income taxes.

 

Nanyang Technological University (NTU) associate professor of economics Walter Theseira said: "I think the main motivation for widening the tax base is, honestly, not the revenue. It's more about the principle of solidarity, which is that everybody contributes something, even if it's not a very large amount. To give the idea that we'll tax you only if you're very rich and the rest of you get redistribution from the rest of these guys - that's not the message to send."

 

Indeed, Mr Tharman had said on Monday that "it would be naive to think that we can keep raising tax rates without affecting our competitiveness", and noted that many Singaporean professionals are in fact working abroad, in places like Hong Kong.

Still, Laurence Lien, chairman and chief executive of Asia Philanthropy Circle, said there is still room for top marginal tax rates to increase further: "Whether it's 22, 24, or 25 per cent - it's still more than bearable for high income earners, who get a lot of value out of being here."

 

Even so, now that steps have been taken to make Singapore's income tax regime more progressive - especially with the introduction of various negative income taxes for lower-income groups in recent years, such as Workfare and the Silver Support Scheme - private-sector economists say a rise in consumption taxes, particularly GST, will be next.

 

Mizuho's Vishnu Varathan, noting that top-end tax rates cannot keep rising without adjustments to consumption tax, said: "It's like eating a fishball on a stick - you don't keep biting on one side because half your fishball is going to drop off on the other side."

He added: "There is a bona fide intent to have our tax system be very progressive, but at the same time, Mr Tharman has emphasised that we have to look at the entire suite of measures to see the progressivity of this.

 

"So at some point - maybe five or eight years down the road - our GST will have to rise to 10, or maybe even 12 per cent."

Even though the GST is a broad-based, regressive tax system, economists do not think that increasing it would undermine recent efforts to make the income tax regime more progressive.

 

UOB's Francis Tan said: "As long as the government is efficient and sufficient in identifying the bottom tier who need GST vouchers, they can increase intensity of subsidy to help those suffering from an additional three percentage point GST hike."

Still, several observers pointed out that this is unlikely to materialise anytime soon, citing the government's assurance in 2011 that the GST rate would not be increased for at least the next five years.

 

Mr Tharman had also said in his Budget speech that, based on current projections, the revenue measures introduced in Budget 2015 "will provide sufficiently" for the increased spending needs planned for until the end of this decade.

 

[Ktglfc]

Soon it will be raised to 10% ... just a matter of time niah ...

after GE !

[Kusje]

People want big government then they complain when they have to pay for big government.

 

Really zzzz.

[Aaronlkl]

Soon it will be raised to 10% ... just a matter of time niah ...

after GE !

 

Its all in the hands of Singaporeans!

Edited February 26, 2015 by Aaronlkl

[Wt_know]

ai raise ... raise la ... tan si mi ...

[Aaronlkl]

People want big government then they complain when they have to pay for big government.

 

Really zzzz.

 

Look at China's Shanghai and Beijing today and 30 years ago... Their gov receives enormous pay cheques?

[The_Bear]

as im watching tv the more i feel the 10% is coming

probably 1 year only.. then increase on the 2nd yr... well done... SINGAPOREAN!!!

He happy happy wanna raise GST u also LL. Sillypore is really doomed. Screwed again for next 5 years.

SINGAPOREAN VOTE... so prepare for 10% GST!!! http://www.mycarforum.com/public/style_emoticons/#EMO_DIR#/furious.gif

Hi Guys,

 

Get your big ticket item soon, 10% is coming not to mentioned the increase in utilities, ERP, public transport, property tax, road tax etc

 

The most expensive "SORRY" in the history

 

We have blew our chance, the next election the new citizen will out vote the low class native.

 

We gonna get "FIX"

 

Till then have fun

 

Cheers

Feb 2015. GST is still 7%. You, you, you and you (twice) got it wrong.

[Pmet]

I think this 10% GST is small problem. The big problem is the influx of new citizens to "fix us". We true bred Singaporeans will soon have no more say in this country. Submit to the govt whatever tax is imposed on us!

[Hydrocarbon]

Guys, I just want to point out this: GST might not have risen to 10%, but there are other "invisible" taxes that eats into our spending power, in a similar way as would a GST hike result in.

 

Consider the increased PARF for vehicles, 140% and the 180% on higher OMV vehicles.

 

Consider the (recently) increased fuel tax.

 

Consider the (just last year) increased alcohol and tobacco tax.

 

Yes, while anyone can argue that this does not affect non-drivers / non-smokers / non-drinkers, the invisible taxes still eats into our spending power as a population.

[Aaronlkl]

Guys, I just want to point out this: GST might not have risen to 10%, but there are other "invisible" taxes that eats into our spending power, in a similar way as would a GST hike result in.

 

Consider the increased PARF for vehicles, 140% and the 180% on higher OMV vehicles.

 

Consider the (recently) increased fuel tax.

 

Consider the (just last year) increased alcohol and tobacco tax.

 

Yes, while anyone can argue that this does not affect non-drivers / non-smokers / non-drinkers, the invisible taxes still eats into our spending power as a population.

 

You missed out the VEP (just last year).

Edited February 26, 2015 by Aaronlkl

[Zxcvb]

During the last election, PAP specifically promised no raise in GST, and they kept their word. This coming GE, confirm will be raised. They will do the usual...

 

Raise GST is to help the poor, haven't raise GST since many years ago, will cost government dunno how many thousands to implement the rise of GST, yadda yadda.

[Watwheels]

Actually they have warn us not to have a clutch mentality or social welfare. Now kns lor.

[Jman888]

Actually they have warn us not to have a clutch mentality or social welfare. Now kns lor.

 

How not to? People keep complaining everything govt never help, now give a bit all say become a welfare state.

[Count-Bracula]

Good lah, easier to calculate.

[Watwheels]

How not to? People keep complaining everything govt never help, now give a bit all say become a welfare state.

 

Ppl will always comprain. There's no way there will ever be a time that ppl will say enough especially when it comes to funds, money. They will always ask for more, and more "help".

[Wt_know]

like i said ... even GST is raised to 9% ... business sure up their price > 2% GST raise ...

might as well GST = 10% make everyone life easier

 

Good lah, easier to calculate.

 

based on this track record

GST would have been raised in 2011 liao

given chance already if raised in 2015

Edited February 27, 2015 by Wt_know

[Alpha78]

like i said ... even GST is raised to 9% ... business sure up their price > 2% GST raise ...

might as well GST = 10% make everyone life easier

 

 

based on this track record

GST would have been raised in 2011 liao

given chance already if raised in 2015

 

If GST increase, we would have EXCEEDED the Swiss standard of living (GST part only). Swiss GST is 8%, ours is not far behind.

 

Only the Swiss standard of salary we are still far far behind...

[Tigerwoods]

People want big government then they complain when they have to pay for big government.

 

Really zzzz.

Yes I also agree.

We want scholarly erection candidates but when they pay themselves with Private sector pay we comprain.

When the candidates are non scholars they say not intelligent enough to become ministers.

Sadly there aren't anymore high calibre people willing to take a less than dignified salary to serve the people.

I support the salaries level of our current team, BUT I expect accountability for goof ups.