Hri Kumar Nair has
proposed levying an additional income and property tax on Permanent
Residents (PRs) and foreigners living in Singapore.
In a
Facebook posting on Wednesday, Mr Hri Kumar said the objective of the
National Defence Duty is to create sharper distinctions between
Singaporeans and others who live or do business here.
He noted that PRs and foreigners cannot contribute manpower to the Singapore Armed Forces and Home Team.
Thus,
they should make a financial contribution for the protection and
preservation of their lives, families, jobs, investments and properties.
Mr Hri Kumar added that those who have sons who are liable for National Service (NS) will be exempted.
However,
those who send their sons away before enlistment will have to pay
back-taxes and penalties, over and above the bond which is forfeited.
This would be the same for those who give up their PR status.
Mr
Hri Kumar further proposed that the revenue earned be placed in a
National Service Trust to directly benefit National Servicemen.
The trust fund can be used to supplement the allowance of full-time National Servicemen (NSFs) from poor families.
In
addition, it could be used to compensate NS men who have been injured
in the line of duty. It could even provide an income for a period of
time to families of NS men who have been killed.
Mr Hri Kumar believes the proposal will not cause PRs and foreigners to flee from Singapore.
He
said that even with the tax increase for foreigners, it will still be
among the lowest of developed countries, and Singapore will still be one
of the more attractive places to live and work in.
Time For A National Defence Duty
In
my speech in the White Paper debate, I said that one of the things we
need to do going forward is to create sharper distinctions between
Singaporeans and others who live or do business here. I had not
mentioned any specific proposals as I did not want them lost in the
wider debate. I offer one now.
The National Defence Duty
I propose levying a National Defence
Duty on PRs and foreigners living in Singapore. I should make clear
that it is not my intention to add to any xenophobic hysteria. As I
will explain, my proposal addresses a current imbalance.
We
know the sacrifice all Singaporean males make, spending two years of
their lives doing National Service, and doing reservist training for
several years after that. It is a sacrifice not just of blood, sweat
and tears. There is also a significant economic cost we pay - two
years of our lives, at the time when we are about the join the
work-force or enter university; perpetually two years behind our female
peers in terms of pay, experience and job opportunities; two years
behind in the property ladder and therefore having to pay higher prices;
less attractive to employers because of reservist commitments. This
has more pronounced disadvantages for poorer families. At the time when
their sons reach a working age and ready to contribute to the families'
finances, they spend two years earning a modest allowance. They cannot
even work part-time to supplement the family income.
I believe
the majority of us accept this as something we must do for the good of
Singapore. And having a strong armed forces, with a significant
reserve force, has no doubt contributed to the security and growth of
Singapore. The same is true of having strong police and civil defence
forces.
The thing is everyone living in Singapore benefits from
this sacrifice - including PRs and foreigners. We cannot expect equal
treatment as it is unrealistic and unworkable to have foreigners do
National Service. And while we can impose National Service obligations
on PRs, there is practically little we can do if they leave Singapore
before enlistment, never to return.
My proposal is therefore a
simple one. All PRs and foreigners must pay additional income and
property tax to be called a National Defence Duty. In short, we do
duty, they pay a duty.
The rationale is simple - since PRs and
foreigners cannot contribute manpower to our SAF and Home Team, they
make a financial contribution to the protection and preservation of
their lives, families, jobs, investments and properties.
Those
who have sons who are liable for NS will be exempted. Those who send
their sons away before enlistment will have to pay back- taxes and
penalties, over and above the bond which is forfeited. Likewise, those
who give up their PR status. This should take care of what I think is
a current anomaly. When PR parents send their sons away before
enlistment, it is the son who is penalized in terms of not being able to
return. I think this is too small a price to pay. More importantly,
the decision would have been made by the parents. They should pay a
cost for that decision. Paying back-taxes and penalties is a fair
solution. The PR parents may of course decide to leave Singapore for
good without paying. But such a move would be a real cost to them as
well as that would mean ending their careers or businesses here. They
are not likely to take that decision lightly.
The National Service Trust
However, the revenue earned should not simply go the general state
coffers. There should be a real and direct benefit to National
Servicemen.
I therefore propose that the revenue earned be
placed in a National Service Trust. The trust funds can be used to
supplement the allowance of NSFs from poor families. It should
compensate NS men who have been injured in the line of duty. It can
even provide an income for a period of time to families of NS men who
have been killed. That will never compensate for their loss, but it
may make a real and tangible difference to families who have been
deprived of their father's or son's contributions. It will also give
confidence to our NS men that should anything happen to them in their
training, their families will be taken care of. If there are
sufficient funds, we can even offer a grant to NS men towards their
first homes, and address the inequity I spoke of earlier of NS men
entering the market later than their peers.
Will this proposal
cause PRs and foreigners to flee our shores? I doubt it. Even with an
increase, our tax rates will still be among the lowest of developed
countries, and we will still be one of the more attractive places to
live and work in.
Taxation is not a fool-proof way of
addressing this thorny issue, but at the very least, it ensures that
everyone contributes to the defence and security of Singapore. Beside,
I believe that if foreigners and PRs see that their financial
contributions directly benefit NS men, they will view the duty as less
of a penalty, and more of an opportunity to make a meaningful
contribution towards the security they enjoy thanks to our NS men. A
chance to do their duty, as it were.
I intend to raise this
proposal in the coming Budget debates. I would be grateful for your
views, and any suggestions you may have to improve it.
There were two main criticisms of my proposal: it is xenophobic, and it “cheapens” National Service placing a monetary value to its performance. Let me briefly deal with them.
Xenophobia
Some label the proposal xenophobic because it is “populist” and “pandering”, and pits Singaporeans against others. The problem with this argument is that it makes the fundamental assumption that the situation we have now is already equitable and therefore any change can only be for populist reasons.
I think many will disagree with that. Indeed, the responses that have been posted debunk any suggestion of xenophobia – see my post “National Defence Duty – A Consolidation”. Most want a re-balancing, but in a principled way that will enable better integration and that those who come to Singapore simply for economic reasons should acknowledge that they are able to do so because of others who do National Service. I do not see that as being xenophobic.
The question is therefore simple: is the current situation equitable? If yes, we leave things be. If not, how can we make it fairer? And to answer this question, we need to have practical and effective solutions, otherwise the issue will not be resolved.
Money
Having spent 2.5 active and many reservist years in the infantry myself, the last thing I want to do is to “cheapen” National Service.
Taxing foreigners to make up for their ineligibility to serve NS does not equate to putting a value on NS. Neither does giving monetary rewards. But we do that anyway, such as giving reservists a modest tax break every year. We all know it is symbolic and no one argues that it puts a value to, or cheapens, reservist duties.
Indeed, placing an economic value on National Service is not a new concept. As one commenter pointed out, in Switzerland, any person who does not fulfil his military service obligation must pay an exemption tax of 3% on his taxable income each year. It is not about valuing the service or buying your way out. It is about giving recognition to those who do their duty, and tax breaks, benefits and penalties are often used as a tool to facilitate that. We also do it for other causes too, like parent relief for our income tax. No one argues that values or cheapens the obligation of looking after loved ones.
I had in my first post talked about the real and significant economic cost which Singaporean men pay when they perform National Service. Most of us served because we believed in the cause, and we do not begrudge that cost. That is however, a separate issue from getting those who do not perform National Service, but benefit from it, to contribute like the rest of us, albeit in a different way.
As I said in my first post, it is not a perfect solution. But it will be difficult to find a practical and effective solution with universal appeal, as the many different views I have received amply demonstrate.
Look out for your NS45 eligibility letters in the mail from now till Apr 13.
You’ll get to enjoy shopping, F&B, IT/gadgets and travel benefits at 5,000 outlets islandwide!
(Registration for NS45 vouchers ends 28 Feb 14; vouchers are valid until 30 Mar 14)
As a one-off recognition initiative to thank National Servicemen for their dedicated service to the nation, SAFRA vouchers and/or FREE 1-year SAFRA membership will be given.
*SAFRA members do not need to register, your benefits will be sent to you automatically via post.
For NSmen in SAF/ RSAF/ RSN: http://ns45.safra.sg/
For NSmen in SPF/ SCDF: http://www.hometeamns45.sg/
NS45 SAFRA Benefits
In celebration of the 45th anniversary of National Service (NS), MINDEF will be giving National Servicemen the opportunity to enjoy SAFRA Benefits with their families.
As a broad-based and inclusive initiative, all who have served NS or are serving NS will benefit from this. Every National Serviceman will receive $50 to $100 worth of SAFRA vouchers, which can be used to redeem lifestyle privileges.
In addition, National Servicemen who are currently serving Operationally Ready National Service (ORNS), or who have completed their ORNS training cycle in full, will also be offered a year's free SAFRA membership. We hope that more National Servicemen and their families will be able to enjoy the subsidised facilities and privileges offered by SAFRA.
General Questions
What are the NS45 SAFRA Benefits?
NS45 SAFRA Benefits is a one-off recognition initiative offered by MINDEF to thank National Servicemen for their contributions to defence, as part of NS45. The Benefits consist of vouchers for all national servicemen, and an offer of a year’s free SAFRA membership for eligible groups of NSmen.
How many National Servicemen will benefit from the NS45 SAFRA Benefits?
This is a broad-based and inclusive initiative. More than 900,000 National Servicemen will benefit from the NS45 SAFRA Benefits. All who have served NS or are serving NS will benefit from this.
When will I receive my free SAFRA membership and vouchers, and what are the validity periods for these Benefits?
National Servicemen will receive a letter of notification by post informing them of their eligibility for these benefits between January 2013 and April 2013. They will be requested to confirm their address before we send them the vouchers. National Servicemen who are offered a year's free SAFRA membership will be sent their membership card, if they accept the offer. The tenure of the free membership will be from 1 Apr 2013 (or the date of application, whichever is later) to 31 Mar 2014.
For National Servicemen that meet the eligibility criteria and are not existing members of SAFRA, the free membership will be valid from April 2013 to March 2014, if they apply.
For National Serviceman that meet the eligibility criteria and are existing members of SAFRA, they will have their memberships automatically extended by an additional year from their original subscription date. [They need not pay membership fees from April 2013 to March 2014.]
What are these SAFRA vouchers?
SAFRA vouchers can be redeemed for extended membership, food and beverage or lifestyle services. Please refer to ns45safra.sg for more information on SAFRA's offerings.
Is Operationally Ready National Service (ORNS) the same as Reservist Training?
Yes. ORNS was previously known as Reservist Training.
Usage of Membership and Vouchers
Can I exchange my SAFRA membership and SAFRA vouchers for cash instead?
No. The SAFRA membership and vouchers cannot be exchanged for cash.
Are the free SAFRA membership and SAFRA vouchers transferable?
No, the free membership and SAFRA vouchers should be redeemed by our servicemen, so as not to dilute the original intent of this recognition measure. Proof of identity will need to be provided when using the vouchers, which are unique to each individual.
Can I obtain a refund for the SAFRA membership which I have signed up earlier?
No, refund for existing membership will not be provided. If you are an existing member, your membership will be extended by another year from your original subscription end date.
Will I be able to use the SAFRA vouchers if I choose not to apply for the free membership?
Yes.
Do I get a new membership card when I apply for the free membership?
Non-members will receive a new membership card with the new expiry date upon application. Existing members will receive a new membership card, with extended validity. Meanwhile, existing members can continue to use their current membership card.
How do I apply for the SAFRA membership?
SAFRA members
For your convenience, the vouchers will be sent to your mailing address. If you are eligible for the free SAFRA membership, you will receive the new membership card together with the vouchers.
SAFRA non-members
For redeem the free SAFRA vouchers and membership (if applicable), kindly log in at ns45safra.sg to verify your details. Upon confirmation, the SAFRA vouchers and membership card (if applicable) will be sent to your mailing address. Alternatively, you can visit any SAFRA clubhouse to redeem your Benefits.
If I apply for the SAFRA membership after 1 Apr 2013, do I still get one full year of free membership?
The free membership will commence from 1 Apr 2013 and last till 31 Mar 2014, regardless of the application date.
(a) Can I use SAFRA vouchers at HomeTeamNS clubhouses?
Yes, you may use SAFRA vouchers at HomeTeamNS Clubhouses and redemption of the vouchers needs to be done over the customer service counter. Do check with the customer service counter on its usage upon redemption of the vouchers.
(b) Can I use HomeTeamNS vouchers at SAFRA clubhouses?
Yes, you may use HomeTeamNS vouchers at SAFRA clubhouses and redemption of the vouchers can be done over the respective facility’s customer service counter. Do check with the customer service counter on its usage upon redemption of the vouchers.
Contact for Information, Feedback and Appeals
I did not receive the notification letter despite meeting the eligibility criteria. What do I do?
Please contact SAFRA at 1800-3775773 for enquiries.
Where can I find more information on NS45 SAFRA and HomeTeamNS Benefits Scheme?
More information on NS45 SAFRA Benefits Scheme is available on ns45safra.sg.
Who can I provide feedback to?
National Servicemen can provide feedback through the Contact Us page on ns45safra.sg.