Singapore. In his closing speech on the debate on Budget 2023, Deputy Prime Minister Lawrence Wong said that Singaporeans pay less in taxes compared to citizens elsewhere. Despite this, they still “enjoy high-quality public services.”
Additionally, he described the country’s tight fiscal position as “very much a reality” over the medium term. This is why there’s a need to proceed with the second GST raise in 2024.
More from OMY: SMEs fear GST hike can hinder 2023 business growth
“Deferring this will only store up more problems for the future and will leave us with less resources to take care of our growing number of seniors,” said Wong, who also serves as the Finance Minister.
Wong also added that Singapore’s tax to GDP ratio settled at 14%, which was lower than other advanced economies.
“This low tax burden rewards hard work and enterprise, and allows our people and businesses to keep most of what they earn,” he stated.
During the speech, three alternative revenue streams were also raised by opposition parties, namely corporate tax, land sales revenue, and wealth taxes. However, Wong said that it’s hard for these to replace the GST.
“Given our growing needs, it is not a matter of choosing between GST and any of these alternatives,” he said.
“Contrary to what the Workers’ Party believes, we will need all of them, and a mix of taxes on income, consumption and assets, to provide sound and stable public finances in Singapore.”
During a speech, WP chief and Leader of the Opposition Pritam Singh warned of “two Singapores” that are emerging in the absence of more action against inequality.
The first one is Singapore connected to the rest of the world as a hub economy, where there are high opportunities and salaries. The next one is where Singapore has perceptions of slow social mobility that are connected to high housing prices.
“These two Singapores could easily become a reality that causes friction in society,” he said.
“Such views can easily take root and manifest themselves in cruel ways,” he added.
Wong also said during his closing speech that more should be done to solve inequality.
“The Government will do our part, but we will not be able to narrow wage gaps on our own … To ensure sustainable growth in real wages for our lower-wage workers, Singaporeans need to chip in too,” he stated.
More from OMY: How to Reduce Income Tax in Singapore Legally for 2023