Tax regime in Singapore

Sir, – The article "Low-paid workers pay lower taxes under Irish system than elsewhere" (September 19th) included factual errors on personal income tax rates in Singapore.

A worker in Singapore with an annual income of €18,000 (28,800 Singapore dollars) pays approximately 0.14 per cent in taxes, after factoring in tax reliefs on earned income and on compulsory employee social security contributions to the central provident fund (CPF). This works out to approximately €26 (S$41), not €3,619 as indicated in the article.

Tax payable could be further reduced if the worker qualifies for other tax reliefs, such as dependant reliefs.

Likewise, contrary to the 16.7 per cent tax rate stated in the article, a worker in Singapore with an annual income of €150,000 (S$240,000) will have an effective tax rate of 9.18 per cent , or less if he or she is able to claim other tax reliefs.

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The article may have included employee CPF contributions in calculating the tax burden. But the CPF is not a social security tax, unlike the pay-related social insurance (PRSI) and universal social charge (USC) in Ireland. Singaporeans have legal ownership over their CPF monies in dedicated accounts, and can use their CPF savings, which enjoy guaranteed risk-free returns, for housing, healthcare, and retirement needs.

In objectively determining regressivity, one should consider taxes net of benefits. Viewed as a whole, Singapore has a progressive system of taxes and transfers. About half of workers in Singapore do not pay personal income taxes. Among those who do, the top 10 per cent pay about 80per cent of our personal income tax revenue. Additionally, the income of low-wage workers is supplemented through other forms of state benefits. – Yours, etc,

FOO CHI HSIA,

Ambassador for the

Republic of Singapore

to Ireland,

c/o Singapore High

Commission,

London.