Corporation lobbyists KPMG and PWC Singapore poured praises for the latest 2018 Singapore Budget, no thanks to the lucrative 40% corporate tax cuts and business subsidies totalling S$2.27 billion. As the sole beneficiaries and winners of the Budget, the two accounting firms even set up a dedicated page – KPMG, PWC – consolidating praises for the Singapore government.
Prior to the Budget announcements, the two foreign corporations have been exerting pressure on the Singapore government calling for more tax cuts and a GST increase (to fund the corporate tax cuts). The Singapore population became a convenient scapegoat, with the support for tax increases blamed solely on the ageing population.
Now that they have won the government over, they are expected to generate, conservatively speaking, tens of millions in profits, directly and indirectly effected by the new tax regime.
This predatory behaviour is however not uncommon. Most businesses in Singapore have a clutch mentality relying on the government for tax cuts and foreign worker quota to be profitable. At a post-budget forum, two Singapore business associations thanked the government for their generosity but lamented that it is still not enough.
Where there are winners, there will be losers who have to pay for the multi-billion tax cuts for the rich. Low income and the middle class are poised to be the hardest hit by the slew of new taxes and increases. An average Singaporean household is expected to fork out S$1,000 more each year due to carbon tax, water price increase and GST increase, and in the classic story of getting a drumstick after giving a chicken, the same group will get back only S$100, or a tenth in return.
Self-employed like taxi drivers will also be hit with mandatory CPF and insurance payments, and even the cardboard collectors would not be spared from a new “recycling tax”. Singaporeans are expected to pay higher CPF and taxes, see more CPF withdrawal delay laws, and a widened income inequality.