Corporate Tax Rate Cut - 1% welcome?
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Singapore needs to have a 1% corporate tax rate cut to remain competitve and to attract more foreign investors into Singapore as well.
But in the article found in Sunday Times page 7 - it states that the 1% corporate tax rate cut is offered to offset the GST increase of 2% (from 5%-7%).
While the businessmen and businesswomen are saving more money with the tax reduction, we normal citizens will be suffering more due to the increase in GST.
On 1 hand, the Singapore Economy will improve due to more foreign investments from overseas, and spendings are of these businesses are expected to go up.
While the rich are earning more and more via savings, we the average middle income to those in the poor category have to pay more GST.
Thus we will only get poorer and poorer.
Is it fair?
Or are we getting help from the govt? -
Without cutting our corporate tax rates, we will lose businesses to Hong Kong and other competitors. More Singaporeans will lose jobs.
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foreign investors will hire cheap foreign workers.
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i wonder, if the cut is really needed.........
but interestingly, gst offsets for the men on the streets are temporary while those for the companies are semi-permanent. -
"Singapore needs to have a 1% corporate tax rate cut to remain competitve and to attract more foreign investors into Singapore as well."
how can the 1% corporate tax cut translate to cushioning of 2% gst raise. that only occurs when companies use the tax savings to increase the pay or hire more of the locals, thus raising their dispoable income (real) and then mitigating the effects of rising prices.
however if in the midst of this cycle, the tax savings are used to hire FT which are cheaper to hire to garner even MORE savings... how does the poor Singaporeans benefit and it offsets the 2% GST? -
the_fallen
wonder why i always see this? doesnt the rich also need to eat/spend? maybe i'll try to do some research on that. If it's true, the govt will need to do alot more than what they did previously to help the poor and middle class.
While the rich are earning more and more via savings, we the average middle income to those in the poor category have to pay more GST.
Thus we will only get poorer and poorer. -
totally agreed. it seems the govt is only trying to get the accounts balanced ignoring the detailsOriginally posted by thousandisland:"Singapore needs to have a 1% corporate tax rate cut to remain competitve and to attract more foreign investors into Singapore as well."
how can the 1% corporate tax cut translate to cushioning of 2% gst raise. that only occurs when companies use the tax savings to increase the pay or hire more of the locals, thus raising their dispoable income (real) and then mitigating the effects of rising prices.
however if in the midst of this cycle, the tax savings are used to hire FT which are cheaper to hire to garner even MORE savings... how does the poor Singaporeans benefit and it offsets the 2% GST? -
well if i'm not wrong the ric/high income save alot from the income tax cuts. + they can afford the extra 2% more easily.Originally posted by the_unknown:wonder why i always see this? doesnt the rich also need to eat/spend? maybe i'll try to do some research on that. If it's true, the govt will need to do alot more than what they did previously to help the poor and middle class.
not to mention the company taxes too actually -
1%?
oh.. that'll just go to the profit margin...
if you think for one moment businesses do not factor that into their accounts, i've got a few used cars you may be interested in
that means that the businesses who are smart enough will pass the cost to the consumers, squeeze their suppliers...
so, while corporations have a bigger profit margin, the man in the street is squeezed even more...
hmmm.. the behaviour is becoming more and more like the GOP.. -
Note that corporate tax cuts doesn't mean necessarily mean it will translate into higher salaries for employees.
It's to help companies lower their cost so that they can compete against other companies.
With more money in hand, they can choose to hire more competent workers, invest in other projects and other stuff.
As such, corporate tax cuts might not offset the GST hike, in the perspective of the general public. -
During MM's interview, he only managed to name 2 countries with lower corporate tax rates, but these 2 countries have entirely different government structure from Singapore, like a population to MP ratio of 100,000 : 1, whereas Singapore has a population to MP ratio of 50,000 : 1. Hong Kong doesn't have GST, whereas Ireland has 0% VAT (GST) for basic necessities.Originally posted by the_fallen:Singapore needs to have a 1% corporate tax rate cut to remain competitve and to attract more foreign investors into Singapore as well.
But in the article found in Sunday Times page 7 - it states that the 1% corporate tax rate cut is offered to offset the GST increase of 2% (from 5%-7%).
While the businessmen and businesswomen are saving more money with the tax reduction, we normal citizens will be suffering more due to the increase in GST.
On 1 hand, the Singapore Economy will improve due to more foreign investments from overseas, and spendings are of these businesses are expected to go up.
While the rich are earning more and more via savings, we the average middle income to those in the poor category have to pay more GST.
Thus we will only get poorer and poorer.
Is it fair?
Or are we getting help from the govt?
Another fallacy in his analysis is, if we don't decrease our corporate tax rates, we will lose all our investments to Ireland and Hong Kong; think about it, how many investments can Ireland and Hong Kong absorb? Hong Kong has a limited land and population (7.1million); whereas Ireland has a limited constraint on population (4 million). They cannot have boundless investment expansion. The main reason we are losing investments is because of India, China, Vietnam, etc. These countries do not have favourable tax rates, but they have low cost of resources like manpower, land, electricity, etc; which we can't compete against because of the structure of our government.
In my opinion, I think when you reach a certain age (65-70), you should retire, because no matter how much you would like to dispute it, our biological system don't function all too well, you are more likely to make sub-optimal decisions. -
high cost of overheads drives investment away.
salary of the people is a small percentage or the whole issue that is driving investors to cheaper places.
Somehow, the policy makers are missing the whole picture. Or had they pretend to miss the picture and transfer the issue upon the people blaming the silent masses? -
i think misty may have hit the nail on the head...
blindness by choice? -
Very true...Originally posted by maurizio13:During MM's interview, he only managed to name 2 countries with lower corporate tax rates, but these 2 countries have entirely different government structure from Singapore, like a population to MP ratio of 100,000 : 1, whereas Singapore has a population to MP ratio of 50,000 : 1. Hong Kong doesn't have GST, whereas Ireland has 0% VAT (GST) for basic necessities.
Another fallacy in his analysis is, if we don't decrease our corporate tax rates, we will lose all our investments to Ireland and Hong Kong; think about it, how many investments can Ireland and Hong Kong absorb? Hong Kong has a limited land and population (7.1million); whereas Ireland has a limited constraint on population (4 million). They cannot have boundless investment expansion. The main reason we are losing investments is because of India, China, Vietnam, etc. These countries do not have favourable tax rates, but they have low cost of resources like manpower, land, electricity, etc; which we can't compete against because of the structure of our government.
In my opinion, I think when you reach a certain age (65-70), you should retire, because no matter how much you would like to dispute it, our biological system don't function all too well, you are more likely to make sub-optimal decisions.
Hehehe..
I like your last para... -
I presume you are in contact with the top corporate executives who will shift the operations to Hong Kong immediately if they do not receive the 1 % cut.Originally posted by oxford mushroom:Without cutting our corporate tax rates, we will lose businesses to Hong Kong and other competitors. More Singaporeans will lose jobs.
When a MNC locates here, they do not consider other factors - only tax rates.
Singapore has already an advantage that other countries like Taiwan, South Korea dont have. Importing of cheaper labour from neighboring countries. Surely
that is a factor. -
I dont think the top corporate executives who will shift the operations to elsewhere immediately if they do not receive the 1 % cut.Originally posted by oxford mushroom:Without cutting our corporate tax rates, we will lose businesses to Hong Kong and other competitors. More Singaporeans will lose jobs.
When a MNC locates here, they consider other factors - not only tax rates.
Singapore has already an advantage over other countries like Taiwan, South Korea.Over here we can import of cheaper labour from neighboring countries. Surely that is an advantage to consider. -
i guess it roots back whether the business is labour intensive or not.Originally posted by mistyblue:high cost of overheads drives investment away.
salary of the people is a small percentage or the whole issue that is driving investors to cheaper places.
Somehow, the policy makers are missing the whole picture. Or had they pretend to miss the picture and transfer the issue upon the people blaming the silent masses? -
the problem is which nationality they offer the jobs to.
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I don't mind the 1% cut, but I wonder if a 1% rise in employer cpf contribution should be in the books?
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This was a real case. I was a kid then but I saw it happen.
I remember long ago in the early 80s, the toy maker Tomy was in Kallang industrial estate. Tomy operated with very little people, mostly are automated machines. When Tomy moved to Thailand, back then PM (now MM) came down to talk to the Japanese boss. The boss said costs are high because JTC rentals are too high for factory space. Tomy asked to negotiate for a better price. JTC flat refused and Tomy therefore decided to look elsewhere. Now just one day before all the operations is moved to Thailand, MM come show up and ask Tomy to revert decision. Japanese boss tell MM, its too late. Besides, the price JTC charge for floor space is just too high and too inflexible.
Therefore it is not a problem that the policy makers do not know. Its just a convenient oversight. So after Tomy case, in the 80s, these "leaders" know.
Its a fact that our policy makers priced us into uncompetitive zones and yet shift the blame of us that we demand high salaries, but keep raising the cost of living.
So when all the policies are made and changes to policies are done, its always that the people to give more, put up with higher cost, live with less basic things, and etc. But I had not seen any shared commitment from the policy makers. They simply sit on their high horses enjoying their lives raising their salaries to greater heights while they tell us there will be no welfare, we have to live on less, pay more and vote them because otherwise there will be horrible chaos because someone not as elite as them cannot run the country.
I look at Japanese PM, Abe. He lead the way to cut his salary and asked the ministers to do so. In a country where the cost of living is so high, I do not see their minister's pay higher than our own and yet they had dropped the pension scheme and had a pay cut to help the economy recover. -
Very well explained.Originally posted by mistyblue:This was a real case. I was a kid then but I saw it happen.
I remember long ago in the early 80s, the toy maker Tomy was in Kallang industrial estate. Tomy operated with very little people, mostly are automated machines. When Tomy moved to Thailand, back then PM (now MM) came down to talk to the Japanese boss. The boss said costs are high because JTC rentals are too high for factory space. Tomy asked to negotiate for a better price. JTC flat refused and Tomy therefore decided to look elsewhere. Now just one day before all the operations is moved to Thailand, MM come show up and ask Tomy to revert decision. Japanese boss tell MM, its too late. Besides, the price JTC charge for floor space is just too high and too inflexible.
Therefore it is not a problem that the policy makers do not know. Its just a convenient oversight. So after Tomy case, in the 80s, these "leaders" know.
Its a fact that our policy makers priced us into uncompetitive zones and yet shift the blame of us that we demand high salaries, but keep raising the cost of living.
So when all the policies are made and changes to policies are done, its always that the people to give more, put up with higher cost, live with less basic things, and etc. But I had not seen any shared commitment from the policy makers. They simply sit on their high horses enjoying their lives raising their salaries to greater heights while they tell us there will be no welfare, we have to live on less, pay more and vote them because otherwise there will be horrible chaos because someone not as elite as them cannot run the country.
I look at Japanese PM, Abe. He lead the way to cut his salary and asked the ministers to do so. In a country where the cost of living is so high, I do not see their minister's pay higher than our own and yet they had dropped the pension scheme and had a pay cut to help the economy recover.
These are exactly the facts that OM is sticking his head in the sand to. -
I think the corporate tax rate cut is a signal that the government is at it's wits end, they can't think of better solutions.
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OM is just a follower (a dog), he is not a leader with visions, he just barks when he is asked to and eat when he is given food.Originally posted by ShutterBug:Very well explained.
These are exactly the facts that OM is sticking his head in the sand to. -
guys.. do not fall into the quagmire of personal attacks..
argue the facts.. and that alone...
by doing so, what is right and true will stand out and not be tarnished by mudslinging...
whatever you think of OM, leave it out of the discussion... don't let anything get personal... else no matter how good your argument is, you will be remembered for slinging the mud -
how nice would it be if there's a
1) 2% corporate tax for businesses - that's to get nearer to HK's 17.5% of corporate tax.
2) increase contribution from employer1%
3) less GST back to 3% (if only our singapore birthrate can fully replace the population like in the past..sigh..)