SINGAPORE - It is important to cultivate the mindset that those who can afford to pay a little more in taxes should do so, said Ms Poh Li San (Sembawang GRC) in Parliament on Monday (Feb 28).
In her speech during the debate on Budget 2022, she noted how most high-income Singaporeans agreed that the business-friendly conditions in Singapore have helped them succeed and some are supportive of the higher taxes to provide for heavier social spending.
"They understand that the changes to the tax system are necessary for the sustainability and stability of Singapore's infrastructure, conducive policies, secure environment and well-developed digital infrastructure," said Ms Poh.
Finance Minister Lawrence Wong announced in his Budget speech on Feb 18 that the top marginal personal income tax rate will be increased with effect from year of assessment 2024 - a move that is expected to affect the top 1.2 per cent of personal income taxpayers and raise $170 million of additional tax revenue per year.
The portion of chargeable income in excess of $500,000 up to $1 million will be taxed at 23 per cent, while that in excess of $1 million will be taxed at 24 per cent, up from the prevailing tax rate of 22 per cent on the portion of chargeable income in excess of $320,000.
Ms Poh acknowledged that some high earners may feel that they have worked very hard for their success and it is not fair for them to have to share their earnings with others who may not have worked as hard.
"I do agree that nothing is absolutely fair and it's never possible to completely justify who should be paying more or less taxes. However, it is important to cultivate the growth mindset that those who can afford to pay a little more taxes, should do so," she said.
Mr Liang Eng Hwa (Bukit Panjang), who chairs the Government Parliamentary Committee for Finance and Trade and Industry, also sounded his support for the Budget and the measures that steepen the overall progressivity of Singapore's tax structure.
"In recent years, as income and wealth disparities continue to widen, the view that the better-offs should contribute more in taxes has gained traction. And it is heartening that in Singapore, we are also hearing such calls from high-income earners and those who are wealthy themselves.
"This reflects our values and mutual responsibility amongst ourselves as a society and as a nation," he said.
Meanwhile, Ms Foo Mee Har (West Coast GRC) suggested that instead of depending heavily on taxes to redistribute wealth, Singapore could explore enhancing its philanthropic policy framework to accommodate new forms of giving and encourage the establishment of more foundations that are more sophisticated.
She said: "Wealthy families and philanthropists are keen to explore new models such as social impact bonds, impact investing, venture philanthropy and so on. Have our current policies kept up with the times?"
Singapore has the opportunity to work alongside a new generation of philanthropists using modern and innovative ideas, so that their contributions can be a fulfilling experience for both givers and beneficiaries, Ms Foo added.
