Forum Replies

Mr. David Goh ("Be more realistic in allowing parent relief", ST Forum, 3 June) suggested that the Government increase the quantum of the parent tax relief so as to keep pace with inflation, and relax the criteria under which it can be claimed.

2. The parent tax relief serves as a form of recognition of tax-payers who look after parents who have no income of their own. Strictly speaking, only those whose parents do not have any income at all would be eligible to claim the relief. The Government decided to adopt a less stringent income threshold of $2000 so that those whose parents have incidental income would still qualify for the relief. It was not to penalize elderly parents who choose to work as suggested by Mr Goh.

3. As the parent relief is not aimed at compensating the taxpayer for the costs of maintaining his parents, it is not pegged directly to inflation or the cost of living. However, the Government has made major moves to reduce personal income tax burdens. Over the last 20 years, taxpayers have benefited from a substantial reduction of tax rates across all income brackets including a reduction from 33% to 20% in the top marginal rate. The exemption of the first $20,000 of income from tax, introduced in 2002, has also meant that 60% of Singaporean workers pay no income tax.

CHIN SAU HO
DIRECTOR (CORPORATE COMMUNICATIONS AND SERVICES)
MINISTRY OF FINANCE