Tax as % of GDP
Country | Tax % |
49.1% | |
44.2% | |
39.3% | |
37.4% | |
36.0% | |
33.3% | |
30.6% | |
28.3% | |
27.9% | |
17.1% | |
15.5% | |
14.4% | |
13.0% | |
13.0% | |
12.8% | |
11.0% |
It seems that the first world countries have a ratio above 25%. Even the USA, has a tax rate of 28.3%. Singapore has one of the lowest tax rates and competes with Hong Kong and Indonesia. The tax rate is lower than the Asean countries. Perhaps, the tax rate of Singapore and Hong Kong is distorted as a large part of the revenue comes from land sale, which is probably not counted here.
I am in favor of higher tax rates to provide more social services, following the example of first world countires. It will also help to narrow the gap between high and lower income earners. Read my views here.
5 comments:
Is revenue from land sales published by the govt? If not, why not?
Or is it for the same reasons why HDB flat cost breakdown cannot be published?
Anybody can enlighten?
Singapore uses a lot of indirect tax eg. COE ,ERP ,maid levy ,GST, foreign worker levy, road tax, car registration tax, tobaco and & alcohal tax..... the list go on and on. All this add up to the 13 percent income tax. In fact our net tax is not low, compare to the european.
A check with the SLA website indicates that the land sales revenue has not been adequately reported by the government (ever). However, if one uses a conservative $10 billion/year (it's much more than this for most years), the government has collected at least S$440 billion since independence. By transferring the land revenue to SLA, HDB is able to report a loss of $2 billion recently.
I have updated the list of direct/indirect taxes (sources of government revenue) in Singapore I wrote two months ago. For the total amount of taxes paid, the People have gotten far too little government services.
1. Income tax. The tax rates are low but they are not the whole story.
2. GST. Whether it is intended or not, the tweaking, in favor of the consumption tax (GST), makes the rich richer and the poor poorer. A wealthy investor who buys/sells financial products and properties is exempt from GST. There is also no capital gains tax in Singapore.
3. Stamp duties for stocks/shares and property sale/rental transactions
4. Corporate tax. For those who own businesses, there are generous schemes to transfer the tax burden from operations to the consumer through GST.
5. All kinds of business licensing.
6. Property tax
7. Car taxes and COE. This is a big one for doing basic counting, even then LTA manages to screw up: ridiculous increase in the vehicular population!.
8. Road tax and additionally the ERP.
9. Utilities and transport. One can make a case that these items incur indirect taxes to the People. By virtue of the structural monopoly, the consumers have been over-paying for electricity and transport relative to say CPI. I regard over-collection as a tax (it is involuntary).
10. HDB conservancy charges. There is over-collection in excess of what is needed for the estate management, including the longer-term lift maintenance, etc.
11. Toilet fixtures. This is collected through the SP Services bill. It an over-collection for plain sewage services.
12. Water conservation tax. Penalty for not conserving water. Of course the threshold is arbitrary.
13. TV and radio license. It is incredulous that this is still collected. Mediacorp is a private corporation (owned by the government), it should fund its own “public programming” requirement by public donation like every other broadcaster in other countries.
14. Custom/Excise taxes (for liquor, tobacco, petroleum products). In many other countries, the tobacco tax is directed towards education against smoking and health care.
15. Estate duty. This is abolished after 15 Feb 2008.
16. Betting tax. We recall that Singapore has a big betting culture (Singapore Pools/Turf Club). Now there will be 2 IRs.
17. Foreign worker levy. This is another big one for doing almost nothing. The MOM doesn’t even need to sweat when the NGOs pick up the slack.
18. CPF. I consider the difference between what the People should get and what they are getting a TAX. We hear a lot about how CPF is paying more interest than the market recently. Do we also hear that how CPF should have paid more interest when the market is paying much interest over the many years in the not so distant past? E.g. CPF Board buys Temasek bonds and Temasek makes 9% annually and CPF members only get 4% annually. There is also opportunity cost to the continual extension to the withdrawal age.
19. And how can I forget the mother of all taxes: the LAND tax? A lot of land was acquired from the People who were under-compensated (try 10cents per square feet in earlier days) and sold as over-priced HDB flats disguised as a subsidy. The profit is a very healthy revenue for the government.
20. The HDB/JTC/GLC/TLC complex is the largest commercial land owner in Singapore. The land cost works itself into most consumption activities, e.g. commercial spaces, shopping malls, restaurants, leisure activities, etc.
NZ taxes its citizens at 12.5% to 38%, depending on income earned. It seems fairly straightforward:
http://www.newzealandnow.govt.nz/singapore/employment-in-new-zealand_page2.html
Here's an interesting podcast on tax in Denmark.
www.npr.org/blogs/money/2010/01/podcast_tax_me_please.html
Highly recommended for everyone to listen.
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