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Should Singapore enhance its wealth taxes to narrow the wealth gap?

Posted on 10/09/2021 by webadmin

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In July 2021, Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), raised the idea of a wealth tax to help manage the widening wealth gap in Singapore. 

Mr Menon suggested that a property gains tax or an inheritance tax may be needed to address wealth inequality, particularly if price increases in private housing consistently outstrip that in public housing. Furthermore, to promote an inclusive society, it might make sense to shift the balance in Singapore’s tax structure away from taxing income towards taxing wealth.

Should Singapore enhance its wealth taxes to narrow the wealth gap?

Joshua Yim, CEO of ACHIEVE Group, contributed  the following comments to The Business Times ‘Views from the Top’ on July 29, 2021:

Wealth is an important contributor to the social cohesion of any nation.

In Singapore, however, our Gini coefficient has remained above 0.4 since 2000, indicating the high level of our income inequality.

In 2020, though our coefficient of 0.442 fell to a historic low of 0.375 after adjusting for government transfers, this is still way higher than that in other developed countries – Finland (02723), Germany (0.3238), Japan (0.3294), United Kingdom (0.3504).

Given that over two-thirds of our working-age population is the backbone of our workforce and economic insecurities have been heightened by the Covid-19 pandemic, it is now imperative to enhance our wealth taxes not just to narrow the wealth.