Budget debate

See Budget measures in totality

Mr Heng Swee Keat said nine in 10 working mums claiming child relief are not affected by the new $80,000 cap on the personal income tax relief.
Mr Heng Swee Keat said nine in 10 working mums claiming child relief are not affected by the new $80,000 cap on the personal income tax relief. ST PHOTO: KUA CHEE SIONG

In his speech yesterday wrapping up the Budget debate, Finance Minister Heng Swee Keat responded to concerns raised by 53 MPs over the past three days. He touched on what businesses and workers need to do, as well as social support measures and the need for a progressive yet sustainable tax system.

The new $80,000 cap on the personal income tax relief that a Singaporean can claim has upset some working mums.

However, there is a good reason for it, Finance Minister Heng Swee Keat indicated in Parliament yesterday when rounding up the debate on the Budget for the new financial year.

He explained that to ensure Singapore's tax and spending system is sustainable, the entire regime has to be fair and progressive.

These two features are the reason for the new move, he said in his reply to three MPs who had expressed concern about the cap during the Budget debate.

Mr Heng also made the broader point that Budget measures should be seen in totality and not be judged solely by their impact on one individual in a given year.

In explaining the cap, Mr Heng highlighted three musts for ensuring Singapore's future spending needs can be met. These are a vibrant economy, prudent spending, plus a fair and progressive fiscal system.

In Singapore, there are 15 types of personal income tax relief and, taken together, they can "unduly reduce total taxable income" for a few taxpayers, he added.

The new $80,000 cap will thus maintain fairness among different groups of taxpayers and increase progressivity, he said.

Further, the vast majority of taxpayers - 99 per cent - are unaffected, he said.

As for working mums claiming child relief - a group highlighted by Ms Lee Bee Wah (Nee Soon GRC), Ms Joan Pereira (Tanjong Pagar GRC) and Ms Tin Pei Ling (MacPherson) - Mr Heng said nine in 10 are not affected by the cap.

This includes those with more children, he added.

For working mums claiming child relief on two or three children, more than eight in 10 are not expected to be affected.

He also stressed to MPs that it is important not to evaluate Budget measures "solely from the individual's perspective in a particular year".

"We should not be narrowly focused on individual winners and losers," he said.

Mr Heng cited Nominated MP Kuik Shiao-Yin's speech on Tuesday, when she warned against the mindset that citizens are in a "high-stakes competition of win-lose".

He said: "Instead, our larger goal is to make every Singaporean a winner in the long run.

"When we help one group, we are actually helping others too."

For instance, Budget measures that support small and medium- sized enterprises will also support good jobs for workers.

Supporting seniors helps the families that care for them, while investing in the young ensures they have the means to support their own families in the future.

"So we have to see it in totality and over the long term, and not just one measure or another, one group versus another, and one year versus another year," he said.

A version of this article appeared in the print edition of The Straits Times on April 07, 2016, with the headline 'See Budget measures in totality'. Print Edition | Subscribe