- Increasing GST
Use returns from reserves instead of raising tax rates
Published on 2017-11-20 by The Online Citizen
by Chris Kuan
Going by the Prime Minister Lee Hsien’s speech, tax rates will inevitably be raised to meet increasing needs from investments in the economy and the infrastructure, and from social expenditures.
By saying so, the PM has also inevitably deliver yet another bodyblow at an enduring governing myth – that we can have low taxes plus good level of investments on the economy/infrastructure and yet pursue extreme fiscal sustainability in the nation’s finances, all at the same time. No, we cannot. It is increasingly obvious.
But of course, old habits die hard. So the solution to increasing expenditures is to raise taxes when the most obvious solution is not to raise taxes but to amend the constitutional rule allowing the sitting government to tap the investment returns from our reserves to fund expenditures.
Presently, Net Investment Returns Contribution permit the government to tap 50% of the expected long-term inflation-adjusted returns earned from reserves. An amendment to move to 100% release around $14b, 3.3% of GDP, nearly 20% of this year’s expenditures into the budget.
That’s twice the amount the government already spent on healthcare. For those who buy narratives without thinking, no this will not deplete the reserves because the reserves themselves are untouched, only the earnings are used.
continue reading here :
Tax increase ‘must be handled with caution’
PUBLISHED 4 HOURS AGO
Seow Bei Yi
The impending tax hike signalled by Prime Minister Lee Hsien Loong at the weekend will exact a political price on the ruling party - unless Singaporeans can be persuaded of its necessity, said People’s Action Party (PAP) MPs and political observers.
And the way to do so, they said, is with “open and honest” communication, like through dialogues to explain why such a move is required.
More aid for needy residents, like bursaries, could also help.
“There is always a political cost if you cannot persuade the ground that a hike in taxes is necessary,” said Mountbatten MP Lim Biow Chuan. “Nobody likes it, and if people think you are just doing it for no valid reason… they get angry.”
Nominated MP Randolph Tan added: “Tax is a very sensitive area, and it can change things for any government.”
Public sensitivity to a tax hike - the form of which PM Lee did not specify but which some economists believe could be a goods and services tax (GST) increase - is also heightened, given that the Finance Ministry had said two years ago there was no basis to claims that the Government would raise the GST after the 2015 General Election. It then referred to Deputy Prime Minister Tharman Shanmugaratnam’s comments that increased spending planned for the rest of this decade is sufficiently provided for by existing measures.
At the PAP convention on Sunday, PM Lee noted that investments and social spending are costly, and the Government has to make sure “we can afford them”.
“For this current term of government, we have enough revenue,” he added. But as spending needs will grow, he forewarned that “raising taxes is not a matter of whether, but a matter of when”.
continue reading here :
http://www.straitstimes.com/singapor...d-with-caution
Good PAP will lose more votes . You think your voters are stupid or what ?
GST hike may be on the cards, say economists and tax specialists
The GST is expected to go up by at least 1 percentage point, say experts, and may be implemented as soon as the Budget next year.
PUBLISHEDNOV 20, 2017, 6:13 PM SGT UPDATED 2 HOURS AGO
SINGAPORE - Economists and tax experts expect the goods and services tax (GST) to go up within the next few years, with an announcement expected as soon as Budget 2018.
The forecasts follow comments by Prime Minister Lee Hsien Loong, who told the People’s Action Party (PAP) convention on Sunday (Nov 19) that taxes will be raised as government spending grows.
Besides a GST hike, the Government could also be exploring alternative avenues for raising revenue, including e-commerce levies, experts say.
Finance Minister Heng Swee Keat hinted at upcoming tax hikes in his Budget speech in February, saying that Singapore’s expenditure needs are expected to rise rapidly in the years to come, particularly in healthcare and infrastructure.
Government expenditure already far outstrips revenue - it expects a primary deficit of $5.62 billion for the 2017 financial year.
Experts say higher tax revenues are unlikely to come from raising corporate tax rates due to the need for Singapore’s economy to stay competitive. Broad-based hikes in personal income tax rates are also unlikely, given the Government’s plan to keep taxes progressive. This makes GST the top candidate.
“The straightforward one is GST, which has not been touched in a decade,” said CIMB Private Bank economist Song Seng Wun. “At the moment, there’s no pressing need to raise GST.”
“But it’s been more than a decade and 7 per cent is very low relative to global averages,” he noted, adding that a 1 percentage point hike would bring in about $1 billion a year in additional revenue.
Mr Loh Eng Kiat, a tax partner at accountancy and business advisory firm Baker Tilly, said: “Globally, there is an increasing shift from direct taxes to indirect taxes as governments relook at the composition of their tax base and the efficiencies of the relevant taxes.
“In line with these underlying trends, I expect it is more likely for Singapore to raise the GST rate rather than to raise the tax rate for corporates.”
continue reading here :
http://www.straitstimes.com/business...ax-specialists
If GST goes up people will tend to spend less . And this in turn will hurt your GDP . Inflation will go up . Still want to vote for PAP ?
Raise taxes to increase spending: $31b Budget surpluses 1997-2016?
Published on 2017-11-20 by Leong Sze Hian
I refer to the article “As Singapore’s spending needs grow, raising taxes is inevitable: PM Lee” (Channel NewsAsia, 19 Nov).
The article notes that Prime Minister Lee Hsien Loong has stated that Singapore’s investments for the economy and infrastructure, as well as spending on social services and safety nets are all necessary, and a vote of confidence in Singapore’s future.
But he emphasised that investments and social spending are costly, and the Government must make sure it can afford them.
PM Lee quoted the Finance Minister Heng Swee Keat’s words during the last Budget and said Mr Heng was right when he said that raising taxes is not a matter of whether, but when.
“Well before the time comes, we have to plan ahead, explain to Singaporeans what the money is needed for, and show how it will benefit everyone, young and old," said PM Lee
50 years of the Singapore Budget
In connection with what PM Lee has shared about the expenses, I added up the Budget surpluses/deficits from 1997 to 2016 using a chart in the Straits Times (5o years of the Singapore Budget).
Net Budget surpluses from 1997 to 2016 – $31.1b?
The total Budget surpluses and deficits were $44.5 and -$13.4 billion, respectively.
This means that the net Budget surpluses from 1997 to 2016 was $31.1 billion ($44.5 – $13.4).
Includes Transfers to Trust and Endowment Funds?
As these figures include Transfers to Trust and Endowment Funds which under International Monetary Fund (IMF) fiscal reporting guidelines should not be charged as one-time expenditures in the Budget – the Budget surpluses may actually be much higher.
FY2016 – Budget surplus $5.2 or $8.8b?
For example, if we add back the Trust and Endowment Funds of $3.6 billion – the Budget surplus would rise from $5.2 billion to $8.8 billion in FY2016.
Budge Cash Surplus from 2005 to 2014 – $190b?
According to the Department of Statistics’ Monthly Digest of Statistics – the total Budget Cash Surplus/Deficit (M130611 – Government Finance, Annual) from 2005 to 2014 was $190 billion (I added up the yearly figures).
continue reading here :
https://www.theonlinecitizen.com/201...ses-1997-2016/
If government say expenditure have gone up . Please justify your claims with breakdown of your expenditures and how you use the tax payers’ money .
“PAP cannot be trusted to keep election promises on not raising taxes” – SDP
November 20, 2017
Prime Minister Lee Hsien Loong confirmation yesterday that higher taxes are inevitable has drawn the ire of the Singapore Democratic Party (SDP), which has called out the ruling party for denying that taxes would be hiked during the elections, only to raise taxes after the elections were won.
When claims that the government would raise taxes erupted in 2015, a month before that year’s General Election, the Ministry of Finance (MOF) was quick to refute the claims, saying that they had no basis.
Posting a statement on the matter online, MOF had reiterated Deputy Prime Minister (DPM) Tharman Shanmugaratnam’s earlier assertion that increased spending planned for the rest of the decade is sufficiently provided for by measures that the Government had already taken.
The SDP said that the DPM should be “up front with the people and stop denying that our warnings of the government raising taxes have no basis,” in an online statement today.
continue reading here :
http://www.theindependent.sg/pap-can...ing-taxes-sdp/
So how can PAP win our trust ? Or have they taken us for granted since 70% voted for them ?
E-commerce could be an area for Singapore to diversify tax base: Indranee
22 Nov 2017 02:00PM (Updated: 22 Nov 2017 02:53PM)
SINGAPORE: The Singapore Government is looking at widening levies on e-commerce to broaden its tax base, Senior Minister of State (Finance and Law) Indranee Rajah was quoted saying in a Bloomberg report published on Wednesday (Nov 22).
In the interview, Ms Indranee mentioned e-commerce as one area that would allow Singapore to further diversify its tax base.
“You can imagine, 20 years from now, the way people purchase is very different and by that time online platforms will be mainstays, so if that’s not part of the tax regime, there’s going to be a lot of holes there,” she said. This change should have been achieved “probably yesterday”, she added.
Currently, online shoppers in Singapore are generally not taxed for their purchases, so long as the order does not exceed S$400, she said.
The process by which Singapore might efficiently tax smaller orders could be complicated, with other countries such as Thailand openly considering such a levy and facing objections, Bloomberg wrote.
“Because it’s a new area, and you want to have a look at countries that have implemented it and you want to learn from them, it’s not something we’re going to rush into but it’s also not something you can put off for too long,” Ms Indranee said. “Do your shopping” now, she joked.
Ms Indranee’s comments came after Prime Minister Lee Hsien Loong signalled on Sunday that Singapore needs to prepare for tax increases, as the Government’s spending has been increasing and will rise further.
She said the Singapore Government will ensure that its tax system is based on “solid” economic performance and on the principle that higher income earners pay more.
“It must be all based on solid economic activity,” Ms Indranee said in the report. Her assessment was that Singapore’s economy is “absolutely” in such a state now.
Amid chatter that the Government could raise the Goods and Services Tax (GST), Ms Indranee declined to comment on specific changes.
She said Singapore’s tax regime is backed by the principles of diverse revenue sources, a progressive system based on income and economic growth. The GST system has been designed accordingly, she added.
The broad nature of the GST and the “offset packages” that have been in place to help lower-income residents demonstrate how the system meets those principles, Ms Indranee pointed out.
Reiterating the Prime Minister’s point that Singapore needs to plan ahead, Ms Indranee noted that social spending will grow as the population ages.
“We have been spending quite a bit on our social spending in the last few years, introducing a great number of social support measures. We have been using the money wisely and prudently,” she said in the interview.
Read more at
http://www.channelnewsasia.com/news/...x-base-9428296
Again claims of higher expenditures by government was not supported . Can we trust the PAP ???
“Profligate spending and irresponsible, unsustainable plans require you to raise taxes” – PM Lee in GE2015
November 22, 2017
“What will make you need to raise GST? Profligate spending and irresponsible, unsustainable plans. That is what will hurt and require you to raise taxes and GST.”
This is what Prime Minister Lee Hsien Loong said at the PAP Headquarters on 5 September 2015, in the middle of the 2015 general elections campaigning period.
Referring to the Workers’ Party’s suggestion then that the government would raise taxes after the election had been won, PM Lee asserted that the government “did not play such games with voters.”
According to the New Paper, he further added:
“I think it’s a strange psychology to think that this is a government which is only dying to do bad things to people… Do we look like that? Here we are, trying to do the best and needing support. And I would turn the argument and say, be careful if they give more votes to the WP.
“WP will become even more arrogant and oppressive over the rest of the parties as they are already so.”
The head of government also added that the PAP would be “mad” to raise taxes just because it received a strong mandate:
“Raising, adjusting taxes is a very big decision. You consider it carefully, you discuss it thoroughly, and you do it only when you absolutely have to.
“What will make you need to raise GST? Profligate spending and irresponsible, unsustainable plans. That is what will hurt and require you to raise taxes and GST.”
Besides attacking the WP, the PM also cast aspersions upon the financial promises of other opposition parties, noting that their manifestos had plans to distribute funds to various groups but did not elaborate much about where these funds would come from:
“So I think when you see a manifesto like that, that’s when you must ask, where’s the money coming from?”
Just over two years after the PAP won the last general elections, PM Lee confirmed at the PAP Convention last Sunday that higher taxes are inevitable and stressed that it is a matter of when and not if taxes will be hiked.
When claims that the government would raise taxes erupted in 2015, the Ministry of Finance (MOF) was another government party – besides the head of the PAP – that was quick to refute the claims, saying that they had no basis.
Posting a statement on the matter online then, MOF reiterated Deputy Prime Minister Tharman Shanmugaratnam’s earlier assertion that increased spending planned for the rest of the decade is sufficiently provided for by measures that the Government had already taken.
Today, the MOF released a new statement and said that PM Lee’s confirmation of a tax hike is “in line” with the DPM’s comments from 2015.
continue reading here :
http://www.theindependent.sg/proflig...lee-in-ge2015/
Now they starting to show their true colour. All thanks to the 70% who voted for them . To the 70% you are also going to pay higher taxes which means you will have less disposable income to use for your daily needs. Well done 70% .
Minister Indranee Rajah: Singapore is rich enough to be tax more
November 22, 2017
Senior Minister of State Indranee Rajah told Bloomberg yesterday (Nov 22) that a tax increase is now justified because Singapore is now rich enough:
“It must be all based on solid economic activity. Singapore’s economy is absolutely in such a state now.”
Minister Indranee also claimed that GST helps the poor, without giving any figures:
“The broad nature of the GST and the offset packages that have been in place to help lower-income residents demonstrate how the system meets those principles.”
Without any statistics, the PAP Minister also claimed that Singaporeans are spending more and that the dictatorship has been using money “wisely and prudently”:
“We have been spending quite a bit on our social spending in the last few years, introducing a great number of social support measures. We have been using the money wisely and prudently. But we are also looking ahead, we are seeing needs for infrastructure spending, spending on ageing population. So we are going to have to need to think of ways in the future of how to fund that.”
The Minister also then proposed that Singapore should start taxing online purchases and tells Singaporeans to “do your shopping now” before the new tax is levied.
“You can imagine, 20 years from now, the way people purchase is very different and by that time online platforms will be mainstays, so if that’s not part of the tax regime, there’s going to be a lot of holes there. This change should have been achieved probably yesterday. Currently, online shoppers in Singapore are generally not taxed for their purchases, so long as the order does not exceed S$400. Because it’s a new area, and you want to have a look at countries that have implemented it and you want to learn from them, it’s not something we’re going to rush into but it’s also not something you can put off for too long. So do your shopping.”
There is no mention of salaries reduction for the S$53-million-a-year Ministerial Cabinet.
continue reading here :
How can the S’pore govt raise taxes? Let us count the ways.
There are many ways the government can take your money.
By Belmont Lay | 5 hours
Raising taxes is a politically challenging thing to do in Singapore.
But that does not mean it cannot be done.
The onus will be on the government to be even more transparent on how the revenue collected is spent.
Raising taxes has been in the news as Prime Minister Lee Hsien Loong hinted at the Nov. 19, 2017 People’s Action Party (PAP) convention that taxes will inevitably be raised to fund future expenditure.
Here are all the ways the Singapore government can raise taxes to build up its coffers.
Raising Goods and Services Tax appears to be the likeliest method — although it might not happen anytime soon.
But a hike in GST could take place in the next five years.
Singapore’s 7 percent GST is among the lowest regionally.
Vietnam, South Korea and Indonesia is at 10 percent and Japan is at 8 percent.
The last time GST was raised was 10 years ago.
A 3 percent GST was first introduced in Singapore on April 1, 1994.
In 2003, it was increased to 4 percent and then 5 percent in 2004.
The last increase was in 2007 to 7 percent.
GST is a significant source of tax revenue. For every percentage point increase in GST, tax revenues could go up by about S$1.5 billion.
In the 2017 financial year, GST collections are estimated at S$11.25 billion — roughly 16 percent of the government’s estimated operating revenue of S$69.45 billion.
continue reading here :
Don’t blame the system but work to change it together: Chan Chun Sing
By Toh Ee Ming
Published24 November, 2017
Updated 24 November, 2017
SINGAPORE – Upset with the pressure-cooker education system here and the obsession with academic grades? Don’t be too quick to “blame the system”, Minister in the Prime Minister’s Office Chan Chun Sing said on Friday (Nov 24).
“We (are part of) the system … and we are all collectively responsible (in making these changes together),” he told some 250 people at a dialoue session, urging them to consider the impact of their own decisions.
The minister added: “We can be the agents of change, rather than waiting for the system to change … The choice is entirely ours.”
Citing a personal example, Mr Chan recalled how his daughter had once asked him, when she was in Secondary Two, to explain the chaos theory – a concept he had learnt only in university.
He then asked the audience whether, as a parent, one ought to try to teach the concept or call up the school to demand to know why were they were teaching it and “wasting my child’s time” in secondary school.
How a parent responded to such situations would teach a child a different value, the minister told his audience at the NTUC Centre Auditorium.
The theme of the event, held as part of the Singapore Children’s Society 65th Anniversary Conference, was on redefining success.
continue reading here :
http://www.todayonline.com/singapore...chan-chun-sing
They are right in blaming the PAP system . To change the system vote the PAP out .