Is this “Robin Hood Tax” here to stay?


Each Budget season, people ask for the handouts they will get, ranging from GST and U-Save vouchers to credits for productivity and skills upgrading. All this is social spending.

Social spending also points to the programs involving handouts to family, investments in transport, health, education and more. The target of social spending in social policy is to “narrowing gaps”: the income gap between the poor and the average man on the street.

It also includes GST rebates, utilities, transport vouchers and education concessions, or “goodies”. Well, these are not “goodies” as commonly labeled. These are necessary measures to control adverse economic side effects (such as increasing wage gaps and inflation).

MPs have demanded a variety of requests into the Budget. Independent organizations ranging from non-profit to the trades unions (represented by NTUC), have also made requests for measures facing all manners of welfare to CPF related changes and even skills upgrading programs (such as SkillsFuture).

All these are cost pressures and will continue to weigh heavily on our annual Budget for many years to come.

Where revenue is coming from and where the money is going to?

It is common knowledge that Singapore has no natural resources to sell for income, like oil. When the country wants to spend (fund a new programme or expand an existing one), it has to find a source of income.

The solution to this is easy: taxation.

The execution, however, is an art.

The layman’s solution is this: why not just tax the rich? Obama has recently done this, significantly raising taxes for the highest income earners.

The trouble is that, being Singapore, many jobs are contingent on the willingness (not ability) of rich people to establish their companies here compared to others. With the emergence of many new cities with a younger and hungrier population, competition for talent will be fierce.


As a result, Singapore does not have much control over instruments such as corporate taxation. In this respect, Singapore is a price-taker, not a price-setter, simply because we can be side-stepped in favor of other emerging economies.

But raise the taxes we have. The recent Budget has seen Parliament requesting for (what I think is) a minute increase. It isn’t really a lot – but it does send a signal to the market that we could be heading in the direction of responsible profiting.

It is too preliminary to come to a reasonable conclusion, one point does not make a trend. It is still innominate and the next two or three Budgets will answer this question.



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About the author

Donavan Cheah

Donavan is currently a Physics student at the National University of Singapore. Besides Physics, he enjoys commenting on issues ranging from education, public policy and even speculating on the future of the country. Formerly from Breakfast Network, he plans to further hone his capability at writing.

Through FSAAM, he hopes to bring readers through seemingly complicated matters in Singapore in simplified manners, illuminate often-forgotten yet important topics for discussion in Singapore’s socio-political context. Hopefully his care for the country will indeed be reciprocated with a maturing society capable of making decisions that will set Singapore in good stead for the future.

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