Corporate tax and GST

Someone said that corporate tax was at 40% previously. It dropped after the introduction of GST.

This statement is not true. It is sad that people can hold a strong belief in a false statement.

GST was introduced on 1 April 1994 at the rate of 3%. It was increased in two stages to 5% and 7% which is the current rate.

The finance minister has announced that the rate of GST will be increased to 9% by 2025. It could be increased earlier.

The rate of corporate tax in 1997 was 26%. It was reduced in stages to the current rate of 17%.

The actual rates are shown in this graph.

Corporate tax is based on profits, i.e. sales less cost of sales and expenses. GST is calculated on sales – with no deduction for cost of sales or expenses. There is deduction only for the GST that are levied at earlier stages of the value chain.

The government collects more taxes from GST than the lose in the reduction of corporate tax.

 

Tan Kin Lian

 

 

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17 Responses to “Corporate tax and GST”

  • Give full history lah:

    Mr Tan, you probably blame people wrongly, again.

    According to this web:
    https://www.guidemesingapore.com/business-guides/taxation-and-accounting/introduction-to-taxation/singapore-tax-system-and-tax-rates

    ” The late 1980s marked a significant shift towards lowering both corporate and individual taxes. In 1987, corporate tax rates were lowered from 40% to 33%.”

    So, it was correct. 7 years before GST, corporate tax was 40%. It was lowered again and again as GST went up again and again.

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  • Think about it:

    LKY once said
    “Will Singapore be around in 100 years? I am not so sure. America, China, Britain, Australia – these countries will be around in 100 years.”

    Singapore depends on investments to make a living. After more than half a century of prosperity some people are ignorant, they thought our success today has come naturally. Many are not aware that this prosperity can just end overnight.
    Today why we are able to attract hundreds of billions of investments here and create jobs and opportunities for Singaporeans is because of the credibility built by our government and the strong support of the voters for maintaining political stability for the last 50 over years. Without this political stability we will never be able to attract such huge investments here. If every four or five years we keep changing governments, we won’t be able to create an environment for businesses to operate here. These investments create diverse job and business opportunities for Singaporeans.

    This year for our nominations day, all 93 constituencies are contesting. (Maybe tikam tikam can win MP pay, after all don’t need to scratch head to map out policy.) What will be the consequences if PAP were to be voted out overnight?
    Will the investors start fleeing because of political risk and policy risk, especially when some political parties are not in favour of foreign workers.
    Many good and high paying jobs will disappear, especially from the MNCs.

    Singaporeans must realise that jobs and opportunities have to be created. They don’t come naturally. If we fail where are we going to find jobs? In our neighbouring countries? Can we earn what we are earning now? Will there be jobs for us?Are we welcome?
    Another important thing is 90 over percent of our daily necessities are imported if we fail can we survive?
    So think, if there is no sure alternative way for us to make a living, never take the risk.
    Or to quote LKY,
    “We will never come back.”
    So is this a joke, a threat or fear-mongering? Think about it.

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  • Good to see:

    @TKL. Good to see you together with the rest at Bendeemer food market (from pic). I think you are better and more famous than some or most. Not good to see you not inside parliament. Good luck anyway.

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  • Times are getting tough:

    After erection, 9% coming soon to recover 100b.

    Uncle better stay at home and eat maggie mee instead of going out to spend!

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  • Policy reset:

    The present policy has create a big divide in Society.
    The rich get richer and the poor life get worse…
    Many of our poor and needy find it hard to survive in this expensive Singapore.They are cash poor…with no proper social support.
    Sad to see so many of our elders still need to struggle in backbreaking low paying jobs when they should be having a decent retirements.
    Need a policy change or reset….do the right thing for our PG /MG elders.
    Give the needy a decent monthly subsistence allowance to retire with dignity.

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  • Before and After:

    Before election, Santa Claus. Distribute chicken wings.
    After election, Satan Claws. Claw back whole chickens.

    Dafts still feel shiok!….Not thinking of future joblessness of their children and grandhildren.

    Go back to farming!
    Venture into AI-Robotic Vertical Farming Startups…

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  • MarBowling:

    Great info provided by Tan Golden Chain, the ex-FOUNDING PAP BRANCH SECRETARY in Marine Parade. He was instrumental in helping 2nd PeeM cum Seatwarmer Woody CHOKing Tong in the establishment of Resident’s Committees(RC), the many man PAPIGS TENTACLES SPREADING ALL OVER THE SHOPS IN SINKAPORE!

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  • Uselesspap:

    political parties are not in favour of foreign workers.
    Many good and high paying jobs will disappear, especially from the MNCs.

    Singaporeans must realise that jobs and opportunities have to be created. They don’t come naturally. If we fail where are we going to find jobs? In our neighbouring countries? Can we earn what we are earning now? Will there be jobs for us?Are we welcome?
    Another important thing is 90 over percent of our daily necessities are imported if we fail can we survive?
    So think, if there is

    ####
    Look around you la,

    Asean, don’t look so far.

    You think pap loose this election , ALL MONEY , BUSINESS, GONE !!

    LOOK AROUND YOU LA……

    ALL CORRUPTED NATIONS…..

    WILL YOU RUN TO THEM WITH YR $$$$ ???

    THINK, THINK, THINK…..

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  • HELLO OLD MAN:

    @Think about it

    Hello Old Man! PAP is happy that they are getting value for the consistency of your barking quality (pathetic but always there).

    Don’t falter yea? Continue showing us why the PAP has no creativity and talent through your posts regularly ok (copy paste the same old false shit again and again)? Then the voters will know who to actually vote for.

    Just remember Goebbels’ method of repeating the same old shit won’t work here. We know better and you are only digging PAP’s grave deeper.

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  • GST:

    Tobacco products, alcoholic beverages – 10% GST
    Milk powder, ALL diary products, rice, cooking oil, diapers, toilet rolls ZERO GST
    The rest – remain at 7% indefinitely

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  • 3% to 5% to 7% to 9% to:

    aiyoh gst hit everyone (including the poor) and in sinkie land context easy to implement (no various tiers of rates for different categories of times ???? but guessing guessing lar that the garment gives rebate (may or not be enough depending on the absolute output gst $$$) to the poor to compensate for this ???

    corp tax is more messier especially on the interpretation of tax deductibility on the different types of expenses lar ?

    and no brainer, people will gravitate to something easier (not so messy) for them to implement or do – our well paid white idiots are no so different from any average sinkie when it comes to this ?

    3% to 5% to 7% to 9% to ………., let you get used or adapt to it slowly so that you are resigned to a lousier & worst off standard lor ???

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  • trublu:

    REMOVE GST,at least on basics like medicals as many sgs are ageing n jobless n have to pay for oredy over-priced medicare!

    G$T AFTER SQUANDERING A $100 BILLION N GRANTING ONLY $700 TO THE HAVE-NOTS,while dishing away multiple$ more to the HAVE$ IS VERY,VERY,VERY REGRESSIVE!

    HSK YOU ARE FROM MAS N YOU SHUD KNOW THIS SIMPLE ECONOMIC FACT!

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  • oxygen:

    CORPORATE TAX is taxing the “rich” shareholders, GST is regressive taxing the poor for consumption. Reduction in corporate tax and increasing GST aggravate the income inequality divide. There is an undefined limit of how far this division can be stretched without political backlash beyond spending capacity or lack of capacity of the poor sustaining rising GST pressure.

    PAPpypolitics abandonment of inheritance and capital gain tax is wrong. Inherited wealth is LAZY UNPRODUCTIVE hand down from prior generation sacrifice of hard work and/or risks undertaking. IT DOES NOT HELP THE ECONOMY except in wasteful wild spending in most instance.

    Capital gains tax exemption also encourage rent seeking speculative endeavor – again unproductive to the economy, income generation and employment creation.

    Just imagine this economy growing at 2.5% average in 10 years yields speculative gain on asset betting rising by 40% in the same interval – that means 15% is froth of bubble fiction, adding to purchase costs and demand for higher yields (rent) to compensate risks and screwing up our global competitiveness.

    THERE SHOULD BE A REINTRODUCTION OF CAPITAL GAIN AND INHERITANCE TAX to force the next generation to work their butt out for a living and grow economically productive enterprises instead of

    - stretching out the palm to receive tax free inheritance

    - and or engage in speculation in real estate and speculative endeavors trading on luck.

    BUT BOTH WILL HIT PAPpys aristocrats banking account balance, so it is unlikely to be introduced in LEE-jiapore anytime soon.

    BUT A SLOWED DOWN GLOBAL ECONOMY SMACKED DOWN BY COVID-19 WILL CUT EMPLOYMENT INCOME AND GRAVELY REDUCE SPENDING IN THE CONSUMER MARKET ECONOMY paring both GST and corporate tax receipt.

    SO HOW, ARRH???

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  • oxygen:

    @ Think about it.

    IF YOU DON’T CHOOSE the future, the “future” will “choose” you.

    Just ask LHY.

    Lee Hsien Yang : You may not be interested in politics, but politics is interested in you

    http://www.tremeritus.net/2020/07/01/politics-is-for-every-citizen/

    HE IS RIGHT OF REALITY.

    I share with you this – inactivism in a world of turbulence will see you wiped out as a inevitable consequences of irrelevance and lost abandonment.

    Yes, think about it.

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  • Allergy:

    Corporate tax is decreased to attract more companies to setup businesses in Singapore and to create more jobs for Singaporean.
    Although Corporate tax is decreased, Singapore government introduced other taxes like the second property ABSD to help in getting revenues for the government which is then distributed to the poorest people in the country.

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  • Need a brain check?:

    Allergy:
    Corporate tax is decreased to attract more companies to setup businesses in Singapore and to create more jobs for Singaporean.
    Although Corporate tax is decreased, Singapore government introduced other taxes like the second property ABSD to help in getting revenues for the government which is then distributed to the poorest people in the country.

    You think this gov is robin hood? Reverse robin hood.

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  • Howlian KKondae TKL:

    Why you neber go and greet him? Don’t gib face to him or he don’t gib face to you?

    Good to see:
    @TKL. Good to see you together with the rest at Bendeemer food market (from pic). I think you are better and more famous than some or most. Not good to see you not inside parliament. Good luck anyway.

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