POSTED 18 Mar 2019 - 15:10

Should wealth be taxed more?

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How might this be done in Singapore, if so?


Victor Mills, Chief Executive, Singapore International Chamber of Commerce
26 Apr 2019 - 17:18

High tax rates are always counter-productive. They only encourage the very rich to find ways to pay less and reduce tax revenue. Luckily, Singapore practises a fair and progressive tax regime for companies and individuals alike.

The more they earn, the more tax they pay at rates which are kept competitive and fair. This approach is the most effective tax collection strategy which is why it should be retained. To meet future requirements, one possible option would be to increase the progressivity of property tax. Another option is to progressively raise the GST rate over time beyond that already announced.

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Yeoh Oon Jin, Executive Chairman, PwC Singapore
18 Apr 2019 - 16:57

Tax policies must be carefully balanced so that tax revenues are not raised at the expense of economic growth. The taxation of capital gains per se can compromise Singapore's position as a major financial hub. We must continue to focus on the benefits of growing the funds and capital markets sector as a means to provide alternative capital to fuel growth for Singapore businesses and to grow our economy.

This will result in more corporate revenue and profits, jobs and salaries, and increase tax collections. From past data, estate duty did not contribute substantially to overall tax revenues and re-introducing it would taint Singapore as a wealth management hub. As current property tax rates and stamp duty on real property transactions are inherently progressive, some increases in the rates could be considered.

The majority of lower and middle income Singaporeans and smaller investors who are residential property owners could be spared so that they do not bear the brunt of this tax. The higher-end properties may have to shoulder the larger burden. Such taxation on wealth should not create a significant adverse impact on the matters mentioned above.

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