INCOME TAX ORDINANCE

[Mr Speaker in the Chair]

The Financial Secretary (Mr T. M. Hart): Mr Speaker, Sir, I have His Excellency the Governor's authority to move,

That this Assembly, pursuant to subsection (1) of section 106 of the Income Tax Ordinance (Chapter 166), resolves that the Second Schedule to the said Ordinance be varied by substituting therefor the following schedule with effect from the 1st of January, 1957: - SECOND SCHEDULE (Section 42) Chargeable Income Rate of Tax $ For every dollar of the first 1,500 5 per cent " " " " " next 500 6 per cent " " " " " " 1,000 7 per cent " " " " " " 2,000 8 per cent " " " " " " 2,000 10 per cent " " " " " " 3,000 12 per cent " " " " " " 5,000 15 per cent " " " " " " 20,000 20 per cent " " " " " " 10,000 25 per cent " " " " " " 5,000 30 per cent " " " " " " 5,000 35 per cent " " " exceeding 55,000 40 per cent

Sir, this motion seeks to amend the Second Schedule to the Income Tax Ordinance.

The first amendment to the existing Schedule is that the rate of tax on the first two slabs of chargeable income, which are at present three and four per cent respectively, are changed to five per cent. The effect of this change is illustrated by the following figures:

An individual with a chargeable income of $200) will pay $10 in tax instead of $6.

An individual with a chargeable income of $500 will pay $25 instead of $15.

An individual with a chargeable income of $700 will pay $35 instead of $23.

An individual with a chargeable income of $1,000 will pay $50 instead of 35

Thereafter, individuals will pay $15 more than they at present pay right up the scale.

It has been said that these increases are likely to cause hardship. This, Sir, I cannot believe. The maximum increase in which these new rates result is $15 and this is due in respect of chargeable incomes of $1,000 or over. An increase of this order is within the means of all taxpayers to pay.

The second amendment to existing rates of tax is the insertion of a new rate of 25 per cent which is applicable to the $10,000 slab of chargeable income immediately above the $35,000 point. The next $5,000 is chargeable at 30 per cent and the next succeeding $5,000 at 35 per cent. This takes us up to $55,000 worth of chargeable income above which point the rate of tax will be 40 per cent. The effect of this increase in tax on chargeable incomes in the higher ranges will be as follows:

In the case of single individuals:

On a chargeable income of $50,000, the old rate of tax was $4,030.

The new rate of tax is $4,045.

On a chargeable income of $75,000, the old rate of tax was $15,230.

The new rate of tax is $18,195.

On a chargeable income of $100,000, the old rate of tax was $22,730.

The new rate of tax is $28,195.

In the case of resident individuals who are married and have no children:

On a chargeable income of $75,000, the old rate of tax was $14,630.

The new rate of tax is $17,395.

On a charge income of $l00,000, the old rate of tax was 22,130.

The new rate of tax is $27,395.

And so on.

These increases, Sir, are fairly substantial but I do not think that they will cause hardship to any taxpayers. It can be argued that taxpayers in these higher groups of income could pay more tax. That is probably true and I have no doubt that the two Governments will come round to this way of thinking in due course. At the same time, however, I doubt if it is generally realised to what extent taxpayers in these income groups contribute in the way of income tax. In this connection, I invite attention to the 1955 Annual Report of the Income Tax Department. From that Report, it will be seen that some 19,000 individuals contribute some $22 million worth of tax. Of these individuals, some 1,200 whose chargeable incomes exceed $30,000, on six per cent of the total contribute $16 million in tax which is 68 per cent of the total. While it can no doubt be argued that these individuals could pay more, even the most biased critic must admit that they already make a not unsubstantial contribution to the general welfare of the people of Singapore. The yield of these proposals is now estimated at slightly over $3� million.

Sir, I beg to move.

The Minister for Local Government, Lands and Housing (Inche Abdul Hamid Bin Haji Jumat): I second it.

Question proposed.

2.36 p.m.

Mr R. Jumabhoy (Telok Ayer): Mr Speaker, Sir, this is one of the devices to raise more money, as I understand it from the Hon. the Financial Secretary: by changing the percentages of tax chargeable on incomes. Sir, this morning we opposed the principle of taxation generally and I can show hon. Members one or two ways by which to avoid this increase and even other increases in tax. One easy way is to get control of our hard currency earnings-U.S, dollars. For years and years, the United Kingdom has been utilising oar dollars and taking full advantage by saying that the money was to be used for the good of the Commonwealth whenever we raised this question in the Legislative Council. Now, Commonwealth countries are independent countries. They remain in the Commonwealth for their mutual good. Our earnings should be given to us. I quote one example of how we are being fleeced indirectly. We are getting consumer goods from America via Hongkong and you can find them anywhere in the market, Sir. Singapore pays the black-market price for them. How is this done? Non-business people may not be able to understand how unless they take the pains to find out. We ask the Government for part or whole of our hard currency earnings to import goods from hard currency countries.

Mr Speaker: Order. I think the hon. Member is now embarking on a debate on something quite extraneous to the motion before the House, which is an increase in the percentages of income tax. He is quite in order, of course, in mentioning it but I would ask him not to enter into a debate on it.

Mr R. Jumabhoy: Thank you, Sir, for pointing that out. I am not debating as dollars -

An hon. Member: Cents.

Mr R. Jumabhoy: - but I am debating on the point that if you save money through our hard currency earnings it is not necessary to have these changes in the income tax. So if you, Sir, can bear with me for another two minutes, I can explain that point.

America ships goods to Singapore via Hongkong which means only transshipment. The steamers touch at Hongkong and black-market money, or free rate is paid there. The bills of lading are given to a merchant and we have to pay black-market money to the Hongkong merchants. In other words, we agree to pay more Malayan dollars -

Mr Speaker: Order. I do not think that the hon. Member has taken my point and that is: he is in order if he just mentions the fact of American dollars but if he goes into detail, I must hold that he is out of order.

Mr R. Jumabhoy: Thank you, Sir, for pointing out again that I should not go into details but then it will be difficult for the Government side to understand. In other words, in short, if our hard currency earnings are kept with us to be utilised by us, no tax or any changes in tax are necessary at all and the United Kingdom has no business whatsoever to utilise our hard currency earnings.

The Minister for Health (Mr A. J. Braga): R. Jumabhoy & Co.!

Mr R. Jumabhoy: There is no need for you to be so -

Mr Speaker: Order, please.

Mr Lee Choon Eng (Queenstown): Can I have your guidance, Mr Speaker, Sir, if it is in order to move an amendment at this stage?

Mr Speaker: Will the hon. Member please indicate what his amendment is?

Mr Lee Choon Eng: Thank you very much, Sir. I move,

In line 1 of the Second Schedule, to leave out- $ "For every dollar of the first 1,500 5 per cent" and insert- $ "For every dollar of the first 500 3 per cent " " " " " second 500 4 per cent " " " " " third 500 5 per cent".

Amendment handed in.

Mr Speaker: Do I understand from that amendment that the hon. Member is endeavouring to restore the status quo in so far as the lower income group is concerned?

Mr Lee Choon Eng: That is right, Sir.

Mr Speaker: The hon. Member is in order.

Mr Lee Choon Eng: Sir, in proposing this amendment, as you have said, I am trying to restore the old percentages before the proposal to reduce the personal relief. It appears to me, Sir, that the Government is not consistent in its policies. I presume that the withdrawal of the Income Tax (Amendment No. 2) Bill was due to the heavy pressure from the public and it appears to me that since there is no heavy pressure from the public on the question of the rates of percentage on the lower income group, the Government is not proposing to restore the old rates of income tax for the lower income group. This is wrong, Sir. It is not because the public is not protesting against these new increased rates but it is because the public is not aware of these new rates. The concentration of the public was on the reduction of the personal relief and this was just a sideline which may have missed the eye of the common man.

I hope the Government will accept my proposal to go back to the old rates. If the original motion is accepted, Sir, I am sure that it will cause much more hardship to the lower income group. It is surprising that the Hon. Financial Secretary said, "It will not necessarily cause much hardship to the workers." I am afraid that he is not aware of the conditions of living of the lower income group, as he is a Minister and he lives on a far higher plane than the lower income group or the common people.

I will say, Sir, why it will affect the workers if this motion is adopted. Take, for instance, a bachelor who earns $3,500 a year. The $3,000 is free of tax and the balance of $500 is to be taxed. According to the new rates, Sir, the tax on the $500 will be $25, but on the old rate he will be taxed $15 which, in the opinion of the Government, is a very small amount. The increase is only $10 and it does not matter. If the total income of a married person is $6,000 a year, $5,000 is free of tax. Based on the new rate, the tax on the extra $1,000 will be $50 and on the old rate, the tax will be $40 - a difference of $10. Now, this $10 may appear to the Government to be a very small sum but I must point out, Sir, that this $10 is a very big sum to the ordinary worker. A worker who is a bachelor with a very small income of, say, a few hundred dollars a month may have to support his parents or his younger sisters and brothers, and in the case of a married man, he has to support his wife and children. Now, this $10, as far as I know, may be enough for three or four days' marketing. I have known of cases of the poorer class of people who spend a dollar a day on marketing and this $10 will allow them and their family, I should say, to exist for ten days. I am afraid that the Government is wrong in thinking that it would not affect the workers at all when they say that $10 is just a small figure. A drop in the ocean will not matter much but that "drop of water" in terms of dollars and cents will matter very much to the poor worker.

I hope that Members on both sides of the House will realise the hardship on the lower income group and will accept my amendment.

Mr Lim Choon Mong (Serangoon): Mr Speaker, Sir, I rise to second the amendment and reserve my right to speak at a later stage.

Question proposed, "That the words and figures proposed to be left out, be left out."

2.49 p.m.

Mr D. S. Marshall (Cairnhill): Mr Speaker, Sir, the Member for Queenstown (Mr Lee Choon Eng) seems to have misunderstood the position as indicated both in the opening speech by the Hon. the Financial Secretary and in the debate on the Second Reading of the Appropriation Bill.

As I understood, Sir, it was not a question of the desire of this Government for increased taxation in these lower groups that brought about either the attempt to reduce the personal allowance or the very mild - what they call - tidying increase in these lower incomes.

It has been made abundantly clear, Sir, that income tax is a pan-Malayan subject and that there is need for co-ordination of our efforts with the Federation and it must surely be obvious to hon. Members in this Assembly that in matters of this and any other nature where there is co-operation between the two territories, there must be ultimate compromise proposals which are perhaps neither completely satisfactory to the Federation nor completely satisfactory to this Assembly.

I think, Sir, it can but embarrass the Government gravely if we seek to upset unduly an agreement reached by it after full consideration with the Federation and this, in fact, is what this amendment seeks to do. There has been a complete agreement achieved by way of compromise with the Federation on income tax proposals for next year. Despite that, Sir, in view of matters that transpired both in this territory and the Federation and as a result of the friendship existing between our two Chief Ministers, there was a concession of a considerable character by the Federation to our wishes. For this, I think we ought to express both our appreciation and a sense of relief that they so conceded.

To seek, Sir, now to overthrow the agreement arrived at in such friendly spirit with the Federation for so minor a matter is not to seek the welfare of this territory or even the poorer people therein but to seek to embarrass the Government purely and simply.

We must recognise that every time we approach taxation proposals, they are a pan-Malayan subject.

Sir, the Member for Queenstown said that $10 could mean ten marketing days. I would remind him that according to his own figures, before any man pays any tax at all, he must earn $3,500 if he is a bachelor, that is, he earns $10 a day and for the whole year, he pays $25 - $2 a month - which means that the Member for Queenstown is trying to save him $10 or one day's pay. Sir, if this bachelor is really living on $1 a day, he is making an extraordinary saving out of which he can well afford a far larger contribution to the country. As for the married man, Sir, he is paying this extra $10 only if he earns $6,000 a year - $500 a month - and out of that $500 a month, he is being asked to pay 5/6th of $1 per month. I do not know exactly how much 5/6th is, Sir. I should say it is about 80 cents a month. Now to call a man earning $600 a month poor and to seek to embarrass the Government because he has to pay 80 cents a month extra is to exaggerate and bring into disrepute the whole democratic procedure and the purpose of a debate on the Budget.

The Minister for Commerce and Industry (Mr J. M. Jumabhoy): They do not understand the -

Mr Speaker: Order.

Mr Marshall: I ask hon. Members to take seriously into consideration not only the obligations of the Government towards its counterpart in the Federation but the obligations of the Opposition to act with responsibility and to maintain the dignity of Singapore in its relations with the territories across the Straits. I cannot believe that the Opposition - the gentlemen who face me - would want the Government to dishonour its arrangement with the Federation on so small a point. I do ask them, though the amendment looks attractive as a political catch motion, it is, in essence, a grave reflection upon the sense of integrity of the people of Singapore and the sense of co-operation with the Federation.

Mr Lee Choon Eng: On a point of information, Sir. Have I got a right to reply?

Mr Speaker: No.

Mr J. M. Jumabhoy: Sir, I have no comments to make on this - most of them are obvious - but I have one question to ask of the leader of the Liberal-Socialist Party who seconded the amendment, and that is: Does his Party stand for the breaking up of the pan-Malayan structure of income tax on this small point?

Mr Marshall: Not so small.

Mr J. M. Jumabhoy: Comparatively.

2.56 p.m.

Inche Ahmad Bin Ibrahim (Sembawang): Mr Speaker, Sir, at the conclusion of yesterday's debate, the Hon. the Financial Secretary made some very happy remarks on the new income tax rates. He was, if I remember rightly, replying to some questions made by the Member for Tanglin (Mr Ede). He quoted some relevant figures to show the amount of tax payable under the new rate as compared with the old rate. The Hon. the Financial Secretary contended that the new structure would be well received by everybody primarily because the increase in tax is insignificantly small.

Mr Speaker: Order. I just want to make it quite clear that we are on an amendment which affects the first line of the Schedule. If the hon. Member is speaking on the amendment, of course, he is quite in order.

Inche Ahmad Bin Ibrahim: Thank you, Sir. In fact, I am supporting the amendment.

At least to his mind, Sir, it is small enough and the taxpayer will not be bothered about it. Sir, I do not deny the fact that the increase under the new rate may be small - only a few dollars - but then whether the taxpayer will mind it or not is a different matter. I believe, in all sincerity, that he will mind for whether the differential is $5 or $15, it still means that the taxpayer will have to forego that sum of money for ever and that he will have to curtail his expenditure by that amount.

But, Sir, the point I wish to make is something more fundamental and it is this. Is the new rate a just one? Let us examine the position before us. I have prepared here a short but comprehensive table showing only the differential increase under the new rate as compared with the old rate but in greater detail than the Hon. the Financial Secretary cared to tell the House yesterday. The table here, Sir, I hope can be easily followed by hon. Members without going into complicated statistics. The point of justice or injustice which I said just now is clearly indicated not in the differential increase but in the percentage increase. Looking at column 5, hon. Members will see that the percentage increase in income tax plunges downwards as the chargeable income rises upwards. On a chargeable income of $500, Sir, the percentage increase on the old tax is 67 per cent -

Mr Marshall: On a point of information, Sir. What is the fifth column? I mean I have heard -

Mr Speaker: Is the hon. Member giving way?

Inche Ahmad Bin Ibrahim: Yes.

Mr Marshall: I have heard of fifth columnists but I have not heard of the fifth column, Sir. Is the hon. Member referring to any particular document?

Inche Ahmad Bin Ibrahim: Sir, I did not say, "fifth column" but I said, "column 5" - if I am not mistaken. According to my table, I have "column 5" here.

As the amount of chargeable income increases gradually to $1,000 and $2,000, Sir, and up to $7,000, the percentage increase in tax payable drops to three per cent. The position is even better or worse depending on how you look at it.

When the chargeable income is $10,000, Sir, the percentage increase in income tax is .35 per cent and at $35,000, the increase is .03 per cent. I hope that hon. Members are able to follow the line of my argument.

Hon. Members: No.

Inche Ahmad Bin Ibrahim: It is only above $35,000 that the percentage increase begins to rise again. Sir, I do not wish to appear malicious or insinuating but I would like to ask the Hon. the Chief Secretary or the Hon. the Financial Secretary or even the hon. Mr Sutherland this question: Under which chargeable income group do they come? We note from the Budget Estimates, Sir, that the Hon. the Chief Secretary draws an annual income of $28,500 while the Hon. the Financial Secretary draws $24,900. Assuming that they enjoy the benefit of all their personal allowances and relief, I venture to say that they are within the $7,000 to $15,000 bracket. They are within the privileged group whose percentage increase of tax is even less than one per cent.

It is obvious, Sir, that the new rates, contrary to some opinion, are totally unjust and undemocratic. They are designed to benefit those in the higher income group, in particular, in the senior ranks of the bureaucracy - Permanent Secretaries, Police Commissioners, directors and controllers or heads of departments and such like. It is not at all surprising, Sir, that Mr Sutherland appeared to be very jubilant in welcoming the new rate yesterday. Having drawn attention to this fact, I am sure that hon. Members will find it fit to oppose the motion.

Mr Speaker: I take it that the hon. Member does not say, "oppose the motion" but "support the amendment". The hon. Member is talking on the amendment, is he not?

Inche Ahmad Bin Ibrahim: Thank you very much, Sir. In fact, I am supporting the amendment.

The Chief Secretary (Mr W. A. C. Goode): Sir, I should like just to express a word of high appreciation for the ability of the Member who has just sat down. I understand that he has succeeded in doing what I have still been unable to do under the expenditure of a large amount of time and that is to work out my income tax. I always have to have considerable assistance in it and I am delighted to hear that he seems to have been able to work it out and I am even more delighted to hear that I think he tells me that my income tax is going down while the rates are being put up.

3.03 p.m.

Mr Lim Choon Mong (Serangoon): Mr Speaker, Sir, let me first answer the question by the Hon. the Minister for Commerce and Industry. He asks us whether our Party stands for breaking away from the pan-Malayan structure as this measure was put forward by the Government of the Federation of Malaya.

The Federation of Malaya cannot put forth such a suggestion unless it consults the Government of Singapore. In effect, it can as well come from the Government of Singapore. On a question like this, it is not possible to ask a Party to support any measure when, in the first instance, they have never been consulted and nothing of this sort has even been whispered to them.

For a Member of the Labour Front to ask my Party (the Liberal-Socialist Party) here to support any measure because it has been fixed up by another Party with their own Party, I think this is asking too much.

Mr J. M. Jumabhoy: With another Government and not with another Party.

Mr Speaker: Order.

Mr Lim Choon Mong: If any Government wants the support of an Opposition Party, it is only fair that the Government consults that Party. If the Government wants merdeka, the Government should realise, first of all, that if it wants a unanimous approach, it must get hold of all the Opposition Parties for a national conference. It should adopt this attitude and not ask for support after they have committed themselves.

However, Sir, speaking in support of the amendment, I will just draw attention to one or two facts. Without the $500-flooring being removed now, the maximum tax collection envisaged will be in the region of $1,500,000. Taking off that $500 relief now, and restoring it to the $3,000 level, it will work out to roughly a quarter of a million dollars. This sum I suggest, Sir, is small and negligible and should not be implemented. Looking at the table and remembering what the Hon. the Financial Secretary has informed us, the taxation levied will affect roughly 12,000 people out of the 19,000 people who are being taxed. Here again, Sir, I suggest that the Labour Front deviates from its principle of trying to collect tax where it hurts least.

3.08 p.m.

The Chief Minister: Mr Speaker, Sir, yesterday, I said that the administration of the Income Tax Ordinance was on a pan-Malayan basis and this point has been brought up again by my friend the Member for Cairnhill (Mr Marshall).

The reason for the amendment, if I gather it rightly, is that my hon. friends on the other side are very concerned for the lower income group. Now, who belongs to the lower income group, Sir? According to the Central Provident Fund Ordinance, a person drawing $200 should not be called upon to make any contribution to the Central Provident Fund because it was felt and it is still felt that a man drawing $200 belongs to the lower income group. Coming now to the illustration given by the mover of the amendment, the Member for Cairnhill has already replied and pointed out that a person who is called upon to make an extra payment of $10 will be one who is drawing, if a bachelor, $300 a month; if a married man at least more than $500 a month and if a married man with children, he would have to draw about $700 a month before he could be called upon to make this sacrifice - if one can call it - of an extra $10 a year which works out at about 80 cents a month. Is this such a great sacrifice to call upon people within those income groups to contribute for the good of the community?

3.10 p.m.

Mr Goh Chew Chua (Ponggol-Tampenis): Mr Speaker, Sir, I support the amendment. I find that a flat rate of an increase of $15 a year is enforced on all annual incomes from $1,000 to $35,000. Is this fair? I should have expected a graduated scale of increase in income tax to have been produced. Surely, a person who receives an annual salary of $35,000 should pay a greater part of that than $15.

Sir, the Ministers and their Assistant Ministers receive annual salaries ranging from $20,000 to $30,000. Was this flat rate of an increase of $15 produced so that they can escape paying more? Sir, is this the Labour Front's idea of Socialism? Surely, this method of increase in income tax cannot be said to be in accord with the Government's often proclaimed intention of placing the burden of taxation on the shoulders of those who would be able to pay.

3.13 p.m.

The Minister for Education (Mr Chew Swee Kee): Mr Speaker, Sir, I am sorry to say that this Assembly has degraded from a very reputable one to that of a classroom and the schoolboys playing cheap politics.

Mr Speaker: Order. I must rule out the whole sentence.

Mr Chew Swee Kee: I am sorry, Sir, I withdraw that. Some hon. Members of this House have been trying very hard to mislead the public. The proposed increased rate of tax does not affect the labouring class. From the figures shown here, for every dollar of the first $1,500, that means the chargeable income and the chargeable income means the assessable income which is your salary less any allowances that you are entitled to. On the first $500, a rate of tax of five per cent is charged. In other words, a bachelor who earns at least $300 a month pays $25 a year - about $2 a month. If this person is classified as one of the labouring class, I fail to understand it.

3.15 p.m.

Mr R. Jumabhoy: Sir, speaking on the amendment, I was very happy to hear the full explanation given by the Member for Cairnhill (Mr Marshall).

On pan-Malayan measures or measures with other countries when the Government is in the minority, it will be very wise to consult the Opposition to achieve harmony.

Personally, I have the highest respect for the Hon. the Chief Minister of the Federation and his Party. I always express this. There is no intention whatsoever of doing any harm to the good relations existing with the Federation but had this position been explained to the Opposition, the matter would have been quite different.

3.16 p.m.

Mr Lim Cher Kheng (Changi): Mr Speaker, Sir, when I rise to my feet, the Minister for Health looks disgusted but I wish to remind him that I am not playing at party politics and I will speak as the man in the street is entitled to.

Regarding the amendment proposed by the Member for Queenstown, I am afraid that I have to remind him that he tends to exaggerate the question of the $10.

Sir, most of the time you will find that we argue and do not see eye to eye with the Government. We ask for more schools and more hospitals and I wonder whether they understand the plea for free education.

Some time ago, a certain Party went to the extent of proposing free compulsory education. I would like to ask this question: Where are we going to get the money? Therefore, I said this morning - if I can recollect rightly - that it is right and proper for us, who call ourselves the leaders of the people, to speak the truth to them. We should work hard and save more towards the goal of a Socialist State or a Welfare State.

But there is one point on which I cannot agree with the Member for Cairnhill and the Minister for Commerce and Industry. We impose this tax because we must compromise with the Federation of Malaya, as we have a pan-Malayan taxation structure. Sir, this hurts me very much. Although we have a pan-Malayan structure on income tax and on many other things, you will find that the picture is very gloomy and disappointing. I have pointed out this morning that the boom days of Singapore as a free port are gone. Therefore, I say that we should let the people know exactly the position we are in today. We want to impose income tax on a pan-Malayan basis but I would like to ask whether the elected Labour Front Coalition Government did try hard to stop the Federation of Malaya from imposing certain duties on our Singapore products. Why did they not have an approach to industry and commerce on a friendly pan-Malayan basis?

Mr William Tan (Tiong Bahru): Because we are afraid of them.

Mr Lim Cher Kheng: Therefore, I think this is now the right time for us to realise the serious situation facing us. I think very soon, or even right now, we will have to face the fact that many factories and shops have to close down.

Mr J. M. Jumabhoy: Quite so.

Mr Lim Cher Kheng: Therefore, I think that the proposal to impose only income tax based on a pan-Malayan structure is quite wrong. Everything should be done on a pan-Malayan basis - not only in regard to income tax but also with regard to economy, industry and commerce.

3.20 p.m.

Mr Hart: May I speak to the amendment, Sir?

Mr Speaker: Certainly.

Mr Hart: I am afraid that the Government cannot accept the amendment.

The increase in the rate of tax on the lower slabs of chargeable income was agreed with the Federation of Malaya as part of the compromise about which the Hon. the Chief Minister spoke yesterday. It has been stressed in the course of this debate and past debates that a pan-Malayan approach to income tax is essential. This increase in the rate of tax on the lower slabs of chargeable income has been agreed and must stand.

On the question of hardship, I refuse to believe that these increases can cause any hardship whatsoever. As has already been said in the course of this debate, no member of the working class is affected by income tax.

I have a certain amount of information - of which I hoped to spare Members of the Assembly - about the rates of tax which were paid in other countries and perhaps hon. Members might like to hear them. I will start by quoting from a comparative table of the rates of tax and the rates of allowances in other countries besides Singapore. For example, in the matter of Personal Allowances, in Singapore, the individual taxpayer has a Personal Allowance of $3,000. In the United Kingdom, his Personal Allowance is $1,020. In Australia, he has no Personal Allowance. In India, he has no Personal Allowance. In Ceylon, it is $1,285. As far as Married Allowances are concerned, in Singapore, the Married Allowance is $5,000. In the United Kingdom, the Married Allowance is $1,800. In Australia, it is $891. In Ceylon, it is $2,250. In Singapore, allowances are paid on a descending scale on children up to nine in number. The total allowance in respect of children in Singapore is $3,150. In the United Kingdom, it is rather higher - $6,000. In Ceylon, it is $2,893.

During the course of the debate last year, mention was made of a table of rates of tax applicable to other territories in the colonial empire. Forty territories were arranged in descending order of incidence of taxation. In this table, Singapore stands at the thirty-third place. The only territories below her are Sierra Leone, the Gold Coast, Nyasaland, Northern Rhodesia, Gibraltar and Hongkong. The difference between Singapore and the territories above her is very marked indeed. The lowest income group quoted in the table is �500, that is, $4,285. In Singapore, a married man with two children would pay nothing. In the Carribean he would pay as much as $80. Even in the Solomon Islands, he would pay $8. In short, the rate of tax in Singapore is probably amongst the lowest in the world.

There is some other interesting information, Sir, which I should like to give to hon. Members. They will be interested to know that in Singapore, some $15 million a year is sent to China as family remittances. At least $16 million is sent to India. Lumping these two figures together, it works out at $25 a head of the population. Again, the population on the basis of 1954 figures, spent $18 million on entertainment tax or $15 a head of the total population. Contributions to totalisators and sweepstakes amounted to over $20 million a year or $16 a head of the population. Again, one in every four gainfully employed persons in Singapore has an account in the Post Office Savings Bank with an average holding of $375. Now, I take it, Sir, that -

Mr A. R. Lazarous (Farrer Park) rose -

Mr Speaker: On a point of order?

Mr Lazarous: On a point of information, Sir. The Hon. Member said that $15 million is sent to China and $16 million to India yearly but he has not said anything about how much money is sent to the United Kingdom. Can he please inform me on that point?

Mr Hart: I regret, Sir, that I have no information about the amount of family remittances to the United Kingdom.

Mr Lazarous: Very convenient!

Mr Hart: They probably are considerable. Most Britons in Malaya make contributions to the cost of the upkeep of their parents. It is not the prerogative of the people of Singapore.

I think, Sir, that the figures which I have quoted go a considerable way to destroy the argument that this incidence of taxation will cause hardship at any level.

One point made by the Member for Serangoon (Mr Lim Choon Mong) was that only the lower income groups were affected by these increases in the rates of tax. Of course, that is not correct. The rates of tax affect everybody.

Mr R. Jumabhoy: Can I ask for some information from the Hon. the Financial Secretary?

Mr Speaker: Certainly.

Mr R. Jumabhoy: The Hon. the Financial Secretary said that our taxation rates are amongst the lowest in the world. What about Hongkong?

Mr Hart: I think I said, Sir, that Hongkong was one of the territories which appeared below us in the colonial schedule.

Mr R. Jumabhoy: Thank you.

Question, "That the words and figures proposed to be left out, be left out," put, and negatived.

Mr Speaker: The original Question is before the House.

3.29 p.m.

Mr Lee Choon Eng: Sir, the revision of these rates, I take it, was the result of a compromise between the two Chief Ministers of Singapore and the Federation. We were told yesterday and today that Members of the Opposition should not embarrass the Government on such a minor affair.

Mr Speaker: Order, I was under the impression that the hon. Member was asking a question. If he is not, he is out of order. He has already spoken on the Main Question.

Mr Lee Choon Eng: I am speaking on the main motion now, Sir.

Mr Speaker: The hon Member has already spoken on the main motion by introducing an amendment.

Mr Lim Cher Kheng: On a point of information, Sir. I wish to ask the Hon. the Financial Secretary the question put by many speakers, whether the Income Tax Ordinance will be changed to consider an increase in the allowance for personal relief?

Mr Speaker: It does not arise. I think the hon. Member can put down a question in the ordinary way.

Main Question put, and agreed to.

Resolved,

That this Assembly, pursuant to subsection (1) of section 106 of the Income Tax Ordinance (Chapter 166), resolves that the Second Schedule to the said Ordinance be varied by substituting therefor the following schedule with effect from the 1st of January, 1957:- SECOND SCHEDULE (Section 42) Chargeable Income Rate of Tax $ For every dollar of the first 1,500 5 per cent " " " " " next 500 6 per cent " " " " " " 1,000 7 per cent " " " " " " 2,000 8 per cent " " " " " " 2,000 10 per cent " " " " " " 3,000 12 per cent " " " " " " 5,000 15 per cent " " " " " " 20,000 20 per cent " " " " " " 10,000 25 per cent " " " " " " 5,000 30 per cent " " " " " " 5,000 35 per cent " " " exceeding 55,000 40 per cent