Seed the view that those able to pay more taxes should, says MP

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 yesterday.

During the debate on Budget 2022, she noted how most high-income Singaporeans agreed the business-friendly conditions here 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," she said.

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 said some high earners may feel they have worked very hard for their success and it is not fair for them 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, sounded his support for the Budget and 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. It is heartening that in Singapore, we are also hearing such calls from high-income earners and those who are wealthy themselves," he said.

"This reflects our values and mutual responsibility amongst ourselves as a society and as a nation."

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.

"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?" she said.