The next time someone boasts about how the government “use my
tax money” or “pay so much tax”, ask them how much tax do they actually pay. Fact: only
about 30% of Singaporeans pay income tax and because of social transfers, lower
income (and low expense) Singaporeans almost do not pay GST.
This means that if you pay tax, it is either you earn a lot of money
or spend a lot of money. Either way, it is fair that you contribute more to the
Where does Singapore fund the country then? Each year, the country spends about S$55b to keep the country going. It gets its money mainly from income tax, GST, corporate taxes and the investment giants GIC and Temasek (via the NIRC).
This is why it is so important to keep the economy going strong. Three out of the four components above rely on Singapore being a rock solid place to do business. This is why a stable political landscape, strong and certain leadership and the rule of law is so important. If companies don’t come here to do work, there will be no corporate tax to collect. Eventually, there will be fewer income tax to collect because people won’t be earning a lot. And when people don’t spend, there will be less GST.
If the government doesn’t collect enough revenue from these places,
we will have less and less to help our citizens. Everything from defense to
healthcare to welfare… these all rely on tax dollars from the rich, wealthy and
powerful companies to get going.
Singapore’s system is actually very powerfully designed – it doesn’t
rely on tax exemption, the rich pay for the rest of the country and social
transfers make things a lot more fair for Singaporeans.