REVIEW TAX SYSTEM TO GENERATE FUNDS FOR GROWTH & SOCIAL WELFARE

I refer to the article PwC calls for tax system review to generate funds for growth, social programmes” (Channel NewsAsia, Nov 19).

It states that “This will also help to cater to the growing need for increased government revenue to fund more social and welfare programmes.”” Budget surplus

$25b a year cash Budget surplus?

In this connection, it may be interesting to note that according to the Department of Statistics Monthly Digest of Statistics October 2015 – we had a cash Budget surplus under IMF fiscal reporting guidelines of $25.3 billion in FY2013 as well as FY2012, and an estimated $900 billion in the Reserves.

Low taxes, high CPF?

As to “With an ageing population, Singaporeans will come to need or expect more social support, PwC said, and Singapore’s tax rates are low compared to countries with generous welfare programmes” - in this connection, it may be interesting to note that, arguably CPF may be like an implicit tax – with annual contributions always exceeding withdrawals.

In 2014, contributions ($29.7 billion) exceeded withdrawals ($17.3 billion) by $12.4 billion.

The total CPF accounts’ balance was $275.4 billion.                      

Moreover, the real rate of return on the CPF Ordinary Account may be the lowest since 1999, of all national pension funds in the world.

Our contribution rate of 38 per cent is also the highest in the world.

Govt not spending a single cent on CPF?

Is the Government not spending a single cent on CPF from a cashflow perspective?

Reciprocate trust with more transparency?

Since the people have given their trust and mandate – shouldn’t we reciprocate by being more transparent?

We should also spend more to help Singaporeans.

Leong Sze Hian

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