SINGAPORE: Tax revenue is crucial to safeguarding the macroeconomy, and Singapore has gained in this area as discussed in the report “S’pore fifth worst tax haven in the world: Oxfam” (Dec 13).
Singapore should be proud of this “statistic”, for it is a sign of efficacious fiscal policies and regulation. The Government is obtaining the desired proportion of tax revenue. The low tax evasion rate here, which can be attributed to a strong tax administration system, makes it virtually impossible for Singapore to be a tax haven. The stiff penalties also make the system work.
Developing countries around the world have always faced fiscal shortcomings from tax evasion, which they must tackle. For example, India’s demonetisation scheme, introduced last month, is finally cracking down on black money and undeclared wealth in the country. This move may herald the dawn of new, ingenious ways to combat tax evasion.
Singapore has so far been on the right track for tax revenue. The Government can efficiently channel the required funds into developing and bolstering infrastructure and other supply-side policies such as expenditure on subsidies to sunrise industries.
These endeavours are vital to the management and welfare of the macroeconomy. Moreover, Singapore has been able to create an appealing business ecosystem with a good image, owing to its competitive tax regime. A headline tax rate of 17 per cent does not burden firms. At this juncture, it is vital to secure maximum investment effectively.
In conclusion, the Oxfam report does not portray the true nature of taxation and the level of stringency. Singapore’s infrastructure is a cornerstone of its financial hub. Tax revenue is what has mainly contributed to that, amid other factors.
