Budget roundtable

Other ways to increase revenue

Government expenditure is projected to be higher by 1.6 per cent in the next fiscal year, and spending on healthcare is also expected to rise in the coming years because of an ageing population.

While a goods and services tax (GST) hike of 2 percentage points will take effect between 2021 and 2025, what other options does Singapore have, in terms of raising revenues?

Moderator Mr Khanna threw up possibilities such as wealth taxes, higher income taxes, estate duties and higher contributions from the Net Investment Returns Contribution.

UOB's Mr Gan said traditional revenue drivers - such as personal income tax and corporate tax - are very much dependent on the growth of the economy.

If the Singapore economy can repeat last year's 3.2 per cent growth, outpacing the lower forecasts, we could "potentially see higher corporate income tax and personal income tax revenues", Mr Gan said.

Though the GST will see a shift from 7 per cent to 9 per cent, the tax rate is still low compared with international standards, as Finance Minister Heng Swee Keat pointed out, Mr Gan said.

The Organisation for Economic Co-operation and Development average is 19 per cent and, among Asia-Pacific countries, many have standard GST rates that exceed 9 per cent.

 
 
 
 
 

Mr Gan said increasing the GST to 9 per cent is about making the fiscal spending and future Budgets more sustainable.

Meanwhile, SBF's Mr Ho said Singapore should be focused on growth, and "not focused on redistribution of a mediocre economic performance".

Mr Ho said it is "underselling" Singapore to settle for just 2 per cent to 3 per cent of growth. Citing Mr Heng's vision for the Republic as "Asia 101", Mr Ho said Singapore can become a global Asia hub for innovation, technology and enterprise.

With good growth, there will be more to distribute at the next Budgets, Mr Ho added. "(We) don't have to worry about increasing corporate tax or wealth tax (and other measures)."

A version of this article appeared in the print edition of The Sunday Times on February 24, 2019, with the headline 'Other ways to increase revenue'. Print Edition | Subscribe