Why was Singapore singled out in Oxfam report?

Oxfam's preference for input measures over policy outcomes in its report on inequality does not hold water, given its internal contradictions (Oxfam, DFI urge countries to do more to tackle inequality; Oct 9).

Inequality is intrinsically "relative" in nature. However, Oxfam's ranking methodology relied on hard "absolute" indicators, as well as principles that smack of a welfare state - as if these could and ought to be universally applied across countries and economies with vastly different make-ups.

For example, Singapore's top personal income tax rate of 22 per cent was criticised for being too low compared with Denmark's average top rate of about 60 per cent the last couple of decades - Denmark being the top-ranked nation in its latest report.

What the developmental charity did not say is that almost half of Singaporean workers do not pay any income tax, compared with about a rate of 45 per cent for their Danish peers in the same earnings category.

In other words, the ratio between the highest and lowest tax rate in Singapore is 22, while it is a mere 1.3 in Denmark.

Seen from this perspective, who is doing more to reduce income inequality?

Oxfam also criticised Singapore for being a tax haven foraffluent individuals and big corporations at the expense of its neighbours' ability to raise more revenue for education, healthcare and other social services.

In fact, it cited this factor as the single biggest drag on the country's ranking in its report.

But Singapore is not the only country or jurisdiction which dangles tax incentives to attract talent and foreign investments.

Some of its neighbours, as well as various countries across Europe and elsewhere, offer such sweeteners at both the individual and corporate levels too. Yet, only Singapore was singled out for condemnation.

Can Oxfam explain why it ranked some of these so-called "tax havens" in the top 20 of its report but censured the city-state?

Is it Singapore's fault when other economies spend well beyond their means, including adhering to certain value systems of governance such as social welfarism, and need to shore up their public finances with punitive tax measures?

Above all, does it make any sense to berate countries for incentivising investments which create jobs as a means of wealth distribution?

Toh Cheng Seong

A version of this article appeared in the print edition of The Straits Times on October 18, 2018, with the headline 'Why was S'pore singled out in Oxfam report?'. Print Edition | Subscribe