Date for tax hike not fixed yet: Indranee Rajah

Media: The Straits Times

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Tham Yuen C and Seow Bei Yi

Comments follow week of speculation on its timing after PM's remarks on issue last Sunday

 

The Government has not decided on the date of the impending tax hike, said Senior Minister of State for Finance Indranee Rajah.

 

In deciding when the hike should kick in, the Government will take into account factors such as setting aside enough time for people to absorb the news, and ensuring the poor and needy "have enough buffer" against the impact, she said in an interview with The Sunday Times .

 

"We're still working on the 'when'," she said.

 

Her comments came after a week of speculation on the timing of the tax hike after Prime Minister Lee Hsien Loong said last Sunday that with infrastructure and social spending set to grow, it was not a question of whether taxes would be raised but when.

 

Ms Indranee, who is also Senior Minister of State for Law, declined to spell out the specifics of the move.

 

But she pointed to how PM Lee and Deputy Prime Minister Tharman Shanmugaratnam had both said the Government has enough revenue for the current term, or until the end of this decade. The Finance Ministry had also said in 2015 that there was "no basis" to claims that the GST would increase after the general election that year.

 

Some analysts have taken this to mean the increases may come only in the next term of government, even if the announcement comes at the next Budget in February.

 

In deciding when the hike should kick in, the Government will take into account factors such as setting aside enough time for people to absorb the news, and ensuring the poor and needy "have enough buffer" against the impact, she said in an interview with The Sunday Times . "We're still working on the 'when'," she said. Ms Indranee, who is also Senior Minister of State for Law, declined to spell out the specifics of the move.

 

The next general election has to be held by 2021, and Workers' Party assistant secretary-general Pritam Singh was among those who have linked the tax hike to it.

 

In a Facebook post last Tuesday, he asked if Singaporeans will be over-taxed and noted that PM Lee had said he would step down after the next general election. He wrote: "Raising taxes before a new PAP prime minister takes office would allow the new leader to start on a relatively 'clean slate', preserving his political capital."

 

He pointed to the staggered increase in the goods and services tax in 2003 and 2004, which took place before PM Lee took over from then Prime Minister Goh Chok Tong, "in spite of the negative economic environment".

 

To this, Ms Indranee responded: "The thrust of the post is that there's actually no need to raise taxes because we have more than enough money and there is an underlying suggestion that it is being done for purely political purposes, and I disagree entirely with that suggestion."

 

She added that while Mr Singh "may not be cognisant of the facts", spending in the areas of healthcare, education, housing and general social support had greatly increased in the last 10 years and was driving the need to boost tax revenue.

 

PM Lee himself had rebutted a suggestion that elections were a factor in deciding on tax hikes, saying in 2015: "Raising, adjusting taxes are a very big decision. You consider it carefully, you discuss it thoroughly and you do it only when you absolutely have to do it."

 

He was responding to WP chief Low Thia Khiang's warning during the election campaign that if voters gave the PAP too free a rein, the Government may raise the GST rate after the polls. WP Non-Constituency MP Leon Perera said the Government will have to "make the case for why (raising taxes) is necessary, and whether it has exhausted all other possibilities".

 

Jurong GRC MP Tan Wu Meng, who is on the Government Parliamentary Committee for Finance and Trade and Iindustry, said: "No one wants to pay more taxes. But, if people see that there is a pressing need to fund essential services and support society, to be more fair and progressive, there is room for people to be persuaded."

Source: The Straits Times © Singapore Press Holdings Limited. Permission required for reproduction.
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Last Updated on December 04, 2017
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