NATIONAL DEFENCE TAX ON CAPITAL INVESTMENTS

Mr Lee Teck Him asked the Minister for Finance whether he will consider the levy of a national defence tax on capital investments by Singapore Citizens in commercial and industrial undertakings on the following scale:-

(a) 1 per cent of investment between $100,000 and $500,000;

(b) 2 per cent of investment between $500,000 and $1,000,000;

(c) 3 per cent of investment between $1,000,000 and $5,000,000;

(d) 5 per cent of investment between $5,000,000 and above;

and if he will introduce the necessary legislation.

Dr Goh Keng Swee: Sir, I see no merit whatsoever in the hon. Member's proposal. At the present moment, we want to increase the rate of investment so as to increase our economic growth. With economic growth, tax yields increase, thereby producing the additional money for defence. The hon. Member wants to penalise citizens who invest in Singapore. Incidentally, does he propose to exempt foreign investors from this tax? lf not, why not? He should not be surprised, in the event the P.A.P. Government were mad enough to accept his proposal, that the Government ends up with less total revenue instead of more. It may be comforting to the hon. Member to know that his ideas are not really unique and several developing countries had been pursuing policies of this kind. The rich and successful are targets of envy, more especially so if they belong to an ethnic minority. Action is taken to deprive them of their wealth, or that part of it the Government can lay their hands on. The end result is not progress and better living standards for the masses, but economic ruin and increasing poverty for everyone.

Mr Lee Teck Him: (In Mandarin): Mr Speaker, Sir, the Minister for Finance says that my proposal has no merit. I think he is mistaken. The advantage of my proposal is that we would be able to buy aeroplanes. Right now the money in the National Defence Fund is not sufficient to buy even one aeroplane. What can we do? Of course, we have to aim at the rich.

The Minister for Finance also says that investors would be discouraged from investing in Singapore. Actually I am aiming at Singapore citizens. On an investment of $100,000, they should be taxed $1,000. On $1 million, they should be taxed $30,000.

Mr Speaker: Mr Lee, I take it that your supplementary question is, has the Minister for Finance considered alternative means of raising money that will be raised by this device?

Mr Lee Teck Him: (In Mandarin): What I want is to reply to him.

Mr Speaker: Standing Orders do not permit you to reply. Please frame a supplementary question.

Mr Lee Teck Him: (In Mandarin): Mr Speaker, Sir, my point is this. We need to build up our national defence. To achieve this, we need to aim at the rich. We should not aim at the poor by increasing the tax on P.U.B. bills. This is making the burden heavier on the poor. What we should do is to aim at the rich.

Dr Goh Keng Swee: Sir, these matters have been dealt with by me at great length and in great detail in my Budget speech. May I invite the hon. Member to make some research in this direction? If he does, I am sure he will not find grounds for saying that we are taxing the poor. It has already been made clear in my Budget speech that exemption limits have been imposed whereby the poorest people are exempt from paying a tax on P.U.B, bills. More than half of the customers of the P.U.B, do not pay such additional tax. I do not know why the hon. Member still persists in believing what the Barisan Sosialis have been saying in Singapore.

Mr Lee Teck Him: (In Mandarin): Mr Speaker, Sir, if the Minister for Finance says that the P.U.B, tax is not aimed at the poor, I am prepared to withdraw my question.