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Should foreigners pay more tax?

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Should foreigners pay more tax?

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  #1 (permalink)  
Old 17-04-2014, 04:36 PM
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Default Should foreigners pay more tax?

http://www.tremeritus.com/2014/04/16...-singaporeans/

Singapore is a peculiar country. In a country of more than 5 million people, almost 2 million of the population residing in Singapore are foreign-born – these account for almost 40% of our total population. While it is undeniable that many foreigners have contributed to the economic success of Singapore, the sudden influx has also brought about a wave of social problems. According to the ‘HSBC The Expat Explorer Survey 2010’, around 45% of the expats have a salary of over USD$200,000 (SGD$250,000) in contrast to the global average of 21%. Clearly many of the expatriates are the beneficiaries of our economic success as much as we have enjoyed their expertise.

However, the system is becoming increasingly unfair for Singaporeans. Our local-born males have to sacrifice two years of their lives to do national service, whereas most of the new citizens are exempted from this requirement. Most local-born males also have to go for re-service annually for a 5 – 10 year period depending on their military vocations. There is nothing wrong with Singapore implementing a national service program. The issue is that the government should do more to draw the lines between a foreigner and a Singaporean. Drawing a line is not discriminatory, it is simply a reflection of the sacrifices of the local-born. One way for the government to draw the line is by rethinking the current policy for personal income taxes.

In Singapore, we do not have a different ‘personal income tax scale’ for foreigners. In order to determine the personal income tax that is due, a person would have to find out whether he is a tax-resident or a non-resident. For most expatriates they would all fall under the category of a ‘tax resident’ like most Singaporeans. According to IRAS, You will be treated as a tax resident for a particular Year of Assessment (YA) if you are a:

-Singaporean who normally resides in Singapore except for temporary absences;
or
-Singapore Permanent Resident (SPR) who has established a permanent home in Singapore; or
-foreigner who has stayed / worked in Singapore (excludes directors of companies) for 183 days or more in the year before the YA.
Whether you are a foreign-born or a local-born, as long as you will be working in Singapore for the ‘near-future’, you are definitely a tax resident.

Some would argue that even though foreigners are in the same category as the local-born, we, the local-born, do qualify for tax reliefs that our foreign counterparts do not. Are the tax reliefs really that substantial to draw the line between locals and foreigners? Let us compare two groups of people. Group A is a group of 30-year-old local-born single men with no liabilities, they hold a non-commander position while serving national service and are in the midst of completing their re-service. Group B is a group of foreign-born single men with no liabilities. What is the difference in tax paid by these two groups of men?

If both men make SGD$60,000 each annually, the man in Group A would pay $830 in personal income tax while the man in Group B would pay $1,040. If a both men make SGD$120,000 each annually, the man in Group A would pay SGD$4,730, while the man in Group B would pay SGD$7,835. If they make SGD$250,000 each annually, the man in Group A would pay SGD$18,370, while the man in Group B would pay SGD$29,570.

It is clear that the differences are simply not that substantial. The personal income tax structure in Singapore does not reflect the sacrifices of our local-born men. Moreover, Singaporeans have to contribute to CPF which reduces our disposable income. Hence the government should consider raising the income taxes of the expatriate and foreign-born community.

One of the reasons why Singapore continues to attract talents to work in our country is because of the low taxes. There is a fear that if we increase the personal income tax for our foreign community, they may leave the country. However, we do not have to increase the tax of our foreign counterparts significantly. Even if we were to increase the ceiling by 5%, we are still a lot more attractive than New York or London. In London if you were to earn SGD$250, 000, you would pay almost SGD$100,000 in taxes. In New York if you were to earn SGD$250,000, you would pay almost SGD$90,000 in taxes. A marginal increase would not prevent the American and British expatriates from coming. They would still receive a large tax discount.

To the question of whether Singapore should increase the taxes for foreigners, I believe there are a lot of other intangible benefits. Tax reliefs are a good way to differentiate between the local-born and the foreigners; and it can more adequately reflect the sacrifices that the local Singaporean men have to undertake. The ‘military tax’ on foreigners can be used to increase the allowances of those doing national service and that would definitely go a long way in reducing the tensions between the local and foreign-born community.

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Old 17-04-2014, 08:51 PM
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However, it is not the New York or London tax rate that we are competing with but it is with other asian economies such as Hong Kong etc....that these expatriates will weigh the pros and cons with.

I agree if after careful study, our tax rate is more competitive than these asian economies, then , we should go ahead to increase the tax of these expatriates.

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Old 19-04-2014, 02:21 PM
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Double foreigner (including PR) tax rate as the px they hv to pay for being able to enjoy e peace and infrastructure of sg while we have to serve ns and in camp training during our prime!!!! Time to get even....

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Old 16-08-2020, 03:17 PM
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looks like nothing changed over the years
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  #5 (permalink)  
Old 16-08-2020, 03:26 PM
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Foreigner pay gsts also.

Income tax is nothing but a small portion

Foreigner spent more and pay more gst than sinkie

They rent more, keep private properties prices high
Without then we ggxx
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  #6 (permalink)  
Old 16-08-2020, 03:39 PM
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Depends on what is our objective. If our objective is to quench inner irate over their very existence, tax away. There are many foreigners (including PR) but only a marginal percentage earns high income. Those foreigners who earn ludicrous income mostly already converted, since being a citizen enjoys more tax reliefs that foreigners are not entitled to. On the NS matter, most companies pay NS men a tad higher salary for equivalent position over others, assuming comparable qualification for the role etc. Ultimately, tax is a mechanism for distribution of wealth, it should correspond to how much one earns than whether one is foreigner or local.

Last edited by thomassh4w; 16-08-2020 at 03:42 PM.
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  #7 (permalink)  
Old 30-08-2020, 08:07 PM
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GST is the main tax income revenue, income tax is peanuts.

Local SMEs are already famously stingy in terms of salary and benefits, if we disincentivise the global MNCs from setting up base here by raising taxes, everyone in SG is going to suffer
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Old 30-08-2020, 10:31 PM
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Quote:
Originally Posted by Unregistered View Post
GST is the main tax income revenue, income tax is peanuts.

Local SMEs are already famously stingy in terms of salary and benefits, if we disincentivise the global MNCs from setting up base here by raising taxes, everyone in SG is going to suffer
Agree

Mnc is the impt ones

Sme occasionally is bad too. Ytd got the agape formwerkz architect saga
Wanna employ a mid level manager for 3.6k with only 14 days leave
Interviewed 7 sinkies but all feel he lowballed
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  #9 (permalink)  
Old 31-08-2020, 12:08 AM
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The idea of pay more tax is not good since not only chase away employers and true foreign talents from all over the world but also make locals lazier and more strawberry

Focus on more benefit of yourself better rather than punish others
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