Why are the poor in Singapore getting poorer? The rich get richer?

In 2022, Singapore’s GDP will exceed US$460 billion, and per capita will exceed US$80,000, setting a new high. Although the year-on-year growth rate dropped to 3.6, it clearly still outperformed most countries. Compared with the per capita average of US$70,000 in 2021, he continues to be the richest man in Asia.

Along with economic development is inflation. In the three years since the epidemic, Singapore’s currency has remained high. The reason is also very simple. As a country that relies almost entirely on imports, rising prices of energy and food caused by geopolitics, coupled with multiple interest rate hikes in the US dollar, rising prices are inevitable. What's more, entering 2023, Singapore has raised its consumption tax by 1 point from January 1, raising the original 7 points on all goods to 8 points, and will increase it to 9 points in 2024.

In 2022, prices have already risen by up to 7 points, but the Singapore government will levy an additional 1 point of consumption tax in 2023. It is foreseeable that inflation in Singapore will continue in 2023. The government has also stated frankly that Singapore’s inflation will strive to maintain between 5.5 and 6.5 in 2023.

You must know that the internationally recognized inflation level is within 3. Inflation in the United States in January was 6.4, which has made the Federal Reserve unable to sit still. It will continue to raise interest rates and vow to control the CPI within 3. And Singapore obviously knows where its currency crux lies. It is necessary to tax goods to increase national revenue and at the same time ensure the stability of commodity prices, so issuing money may temporarily alleviate the contradictions among the masses.

Therefore, Singapore decided to issue money. But distributing money is definitely not "paying money to the poor and taxing the rich" as the title says. This title is a bit rhythmic and artificially divides class antagonisms. In fact, what Singapore does is "tax everyone and give money to some residents."

1. Tax increases, especially consumption taxes, are tax increases on all commodities. Not looking at people. Whether it is chicken, duck or fish, both poor and rich people have to pay a consumption tax of 8%. This is printed on the shopping receipt. You can clearly see the price of the product, the consumption tax and the total amount. In 2023, Singapore increased by 1 point, from 7 points to 8 points, and will continue to increase from 8 points to 9 points next year.

Does China have a consumption tax? Yes, it does, but not for all goods, only for some goods. The scope of consumption tax is mainly cigarettes, alcohol, cars, cosmetics, gasoline and other specific non-essential goods. The tax rates levied also range from 3 to 56 for cigarettes. However, for food and other daily necessities such as pork, chicken, vegetables, fruits, and rice, not only are no consumption taxes imposed, some are also exempt from value-added tax (Singapore all requires a value-added tax of 17) .

Why should I compare China here? Nowadays, many articles like to beautify countries such as Europe and the United States. Singapore was once considered the most suitable country for immigrants. But in fact, from the perspective of tax burden, China has given a lot of basic support to ensure that more than one billion people have enough food. It is not as simple as issuing money to a small country like Singapore.

2. Distribute money. Singapore has collected an extra 1% of the overall consumption tax. Let’s see how much money it has distributed to the people.

February 14 is the day when Singapore’s 2023 fiscal budget will be made public. This is also the first fiscal budget to be fully liberalized after the epidemic. This budget has a total value of nearly S$124 billion.

The first subsidy is the consumption tax subsidy.

In order to offset the impact of the increased consumption tax on families and individuals, the government has decided to increase the maximum subsidy from S$500 to S$700 in 2023.

The criteria for receiving this subsidy are based on the value of the house where Singaporeans live.

For those whose annual housing value does not exceed S$13,000, the cash subsidy from the consumption tax voucher will be increased to S$700 from this year;

The annual value of the housing is between S$13,000 and S$2 For those with an income of SGD 1,000, the cash subsidy amount is SGD 350.

What is the annual value of a house? Simply put, it is the net rental income of a house after deducting property management fees and other expenses.

If your rental income is less than 13,000 Singapore dollars (1 Singapore dollar = 5 yuan, 65,000 yuan), you can receive a subsidy of 700 yuan per year, and if it is more than 13,000 and less than 21,000 Singapore dollars, you can receive 350 Singapore dollars. Above 21,000, there is no money.

The core key point here is that those who do not own a house cannot receive subsidies, and those who have houses with high rental returns cannot receive subsidies.