How I hate this building. In years long past my nonchalance towards a citizen's responsibility to speedy settlement of personal taxes, coupled with my proclivity to procrastination, often ended up with me having to go down to the IRAS office to sort things out. The IRAS has a very simple and absolutely effective way of handling delinquent block heads like me. The fines just doubled up, tripled, quadrupled till at some point the irresistible force can move an immoveable object.
This year the IRAS is going to collect more taxes from me. But this time it will not require me to go down to their office. I am referring of course to the GST which has gone up from 7% to 8%. It will increase again to 9% next year. The Ministry of Finance has said the additional 2% will raise about S$3.5b annually. This additional revenue is required to meet health care cost for a graying population, so they said. What the government is not saying is the Pioneer and Mederka generations have been so fawning building up reserves to take care of future generations, the new generation is now unable to take care of the graying citizens whose future has arrived. Is the Pioneer, Merdeka, Millennial generation, or Gen X, to blame or is it some screwed up policy somewhere?
What else has the government not told us? The big fishes that got away. The tax leakages that they turn a blind eye to. Oh ya, they have been good at throwing the kitchen sink at me for years over a thousand bucks in late payment here and there. But the millions, well there is always another Daedalus explanation from officialdom.
In 2021, Singapore was ranked 9th in the global Corporate Tax Haven Index, and 5th in the Financial Secrecy Index. Pretty impressive ranking, right? Except for these 2 indexes, the higher ranking means the badder the country is. Singapore looks the other way for big fishes to avoid taxes.
These 2 indexes show how good Singapore was in 2021 at allowing cross-border corporate tax abuse by multinational corporations and private tax evasion by private individuals. According to the Tax Justice Network. the tax lost by Singapore due to global tax abuse was S$5.7b (US$4.277 x 1.3). Let that sink in. For some sense of perspective, that represents about 10% of total state revenue for 2021. And the social cost, you need to look at it this way. The lost tax amounts to 70% of the health budget, making the increase in GST unnecessary.
At a time of crippling inflation, the government raises GST to collect S$3.5b from everybody, including those trying hard to make ends meet, but lets slip about S$5.7b (2021) that fat cats with creative accountants and glib lawyers can buy.
The S$5.7b is split down the middle between abuses committed by multi-national corporations and private individuals.
Illicit financial flows are transfers of money from one country to another that are forbidden by law, rules or custom. There are various channels for such illicit transfers. For Singapore, this is mainly via outward trade in which we have a bad score of 66/100 (100 is the baddest). These outward trades are captured with trading partners. In the case of Singapore, the 3 major partner countries are Liberia, Panama and Hongkong. Well, what do you know. The three biggest tax havens in the world!
There is a proliferation of trust companies in Singapore, mostly are foreign entities. They all have offices that operate in all the popular tax havens worldwide. The better to facilitate illicit financial flows. When the Panama Papers came out in 2016 and 2 Singapore domiciled trusts, Asiaciti Trust and Trident Trust, were mentioned, MAS said the 2 were already in their sights before the leak came out.
Ya, right.
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