INCOME TAX RELIEF (Raising of)

Mr Ang Nam Piau asked the Minister for Finance whether he is aware of the difficulty of the majority of wage-earners to pay their income tax due to the rising cost of living and if he will consider raising the present rate of income tax relief.

The Minister for Finance (Mr Hon Sui Sen): Mr Speaker, Sir, so soon after the Budget session, when the same question of tax relief was asked and debated, the Member for Thomson surely cannot expect any answer than that the present rate of income tax relief will not be increased.

As far as the first part of his question is concerned, the answer is that I am not aware that there has been much more difficulty in paying income tax recently because of the rising cost of living. The new Consumer Price Index shows that from the base of 100 for the period June 1977 to May 1978, there has been only a 3% rise in prices. The majority of taxpayers have surely had a greater increase than this in their earnings in the comparable period.

In any case, the cost of living is not a major consideration in deciding our tax relief policy. An objective of taxation policy is to increase our tax base, to spread the load of taxation over as many people as possible, so that the cost of public services, including social and security services, will be more evenly borne.

At present, 90% of the workforce in the US are taxpayers, in Australia, 95%, in Japan, 60%. In Singapore only 30% pay tax. Any increase in the income tax relief will have the effect, therefore, of reducing further the number of taxpayers.