No, these are not “ang pows”, these are Singapore’s way of doing tax exemptions

Singaporeans have a bad habit. We see each Budget season as an ang pow season. But no, these are not ang pows. And these are not goodies that come about only at elections. These are also not chicken wings to be handed out. These are actually permanent features known as “social transfers”. It is how the government redistributes money to the poor without giving tax rebates to the rich.

It is quite stupid to call it vote buying. You can accuse it of that if it happens only at elections…but this has been happening every year for the past almost twenty years (when New Singapore Shares was distributed)! If you still insist it is vote buying then you are in complete denial.

Ok, you can ask simi is “social transfer”. It works like this:

  1. Government doesn’t want to take money from the poorer people in society. This is why they don’t collect taxes from 60% of Singaporeans. But how about GST?
  2. If you write off GST from “essential items”, then the rich also don’t have to pay. Worse, if you don’t collect GST, then the rich will be laughing because everything from petrol to property to expensive restaurants will then be tax exempt! (And hor, what is “essential” anyway? Are mobile phones, TV and internet essential? ….something to think about)
  3. So the gahmen got his plan: We collect GST first. But don’t worry, each year we’ll return the money collected back to you. These are the social transfers.

If you don’t have very high expenses, if you don’t have a car, eat at restaurants, buy branded goods, buy property frequently… You really don’t have to worry about GST. Even if you spend $1000 every month, you pay only about $840 in GST a year. The government returned between $600 to $1000 in GST vouchers alone last year. This excludes the other social transfers they give out.

So, there’s really no need to be too excited about social transfers. They’re not ang pows, they happen each year and it is a normal way that Singapore manages taxes.

Share your thoughts!

Zeen is a next generation WordPress theme. It’s powerful, beautifully designed and comes with everything you need to engage your visitors and increase conversions.