This was a personal writing on mine which I posted on my blog a
couple of months back.
Singapore may have one of the lowest personal income tax rate and
corporate tax rate in the world, but in reality the PAP employs
various schemes of hidden taxation which makes Singaporeans one of
the highest taxed citizens in the world.
For a start, those who live in HDB flats don't really own them.
They are practically leased from the government for 99 years. The
current market rate is sky-high. Many Singaporeans end up ploughing
a large part of their life savings into their HDB flat, and they
cannot always sell to realize capital gains as people need a roof
over their heads. The only way to extract capital gains is to
downgrade, which in effect is just transferring one lease to
another. You never truly own your HDB flat at all.
GST is creeping up. It may still be much lower than those so-called
Value Added Tax in european countries, but the way I see it the gap
will continue to close. The reason is that the PAP govt wants a
more recession-proof tax base, never mind that it is a tax base
that hurts the poor and small businesses the most, compared to the
rich and large businesses which tends to have higher profit margins
are more insulated against rise of costs at the margin.
GST results in the poor spending a much larger PERCENTAGE of their
net income on household items and basic necessities compared to the
rich. Even though the rich pay a much higher percentage of their
income as direct tax, the fact remains that direct taxes have been
kept low or even reduced over the years, while indirect taxes like
GST have risen and hurt the poor proportionally more.
Last but not least, medical costs are escalating and rising much
greater than the overall rate of inflation. Given that we do not
have a comprehensive medical welfare system apart from the flawed
Medisave and various Medishield schemes, once again Singaporeans
lose out compared to citizens of other countries that have more
comprehensive medical welfare policies. Escalating medical costs
are therefore increasingly become another major source of
"unreported" taxation on ordinary Singaporeans due to the PAP's
anti-welfare policies.
The PAP govt likes to flout our low direct tax rates and claim this
keeps us competitive.
In reality the economy is made uncompetitive because the PAP power
structure entrenches itself in the GLCs and major corporations like
Singtel. These bureaucrats lack good business skills and are not
wordly-wise, having been sitting behind their desks in their own
political ivory towers. Hence, when these PAP bureaucrats and
stalwarts entrench themselves as directors, chairpersons and CEOs
of these GLCs, they make them uncompetitive, and being
monopolistic, they deprive other businesses of the opportunity to
compete, innovate, and thrive.
And so the points mentioned above are the reasons why although
Singaporeans have the lowest personal income taxes in the world, in
reality they are one of the most heavily taxed through indirect
means.
