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Budget 2023: Fiscal headwinds call for hard choices
As surpluses dry up, raising tax revenues and productivity will be key to fiscal sustainability
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Raising GST into the double digits should be an option beyond the medium term, even if politically difficult, says the writer.
PHOTO: ST FILE
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In the run-up to budgets in the 1990s, it was common for economists to be asked: “Will there be more tax cuts?” It was a fair question because cutting taxes was then in vogue, and the answer was usually yes.
Singapore’s top personal income tax rate came down steadily from 33 per cent in 1991 to 20 per cent in 2016. Corporate income taxes were reduced as well, more or less in lock-step. With the goods and services tax (GST), introduced in 1994, Singapore was able to run regular budget surpluses as well as add to its reserves.
