SINGAPORE — A tax on luxurious goods such as high-end cars and landed property as well as an inheritance duty on multi-million-dollar homes may seem like plausible ways to protect Singapore's meritocracy, but it can be challenging and even costly to implement and enforce such measures.
Experts interviewed by TODAY pointed to administrative challenges such as classifying luxurious goods to be taxed further and how the wealthy can get around an inheritance tax by gifting a property.
The proportion taxed should be higher for more expensive properties, going up to 25 per cent for Singaporeans and 35 per cent for foreigners, broadly in line with current Additional Buyer's Stamp DutyHowever, experts said that while this suggestion might sound attractive, the cons outweigh the pros. In 2008, the country had abolished its estate tax — which includes a deceased person's assets such as cash and properties — due to low tax revenue collected and to attract entrepreneurs to relocate to Singapore, which the Government said would benefit society as a whole.He added that an inheritance tax as suggested by Mr Thomas “will be quite easy for families to plan around by gifting their properties to the next generation during their lifetime".
“For example, many middle-class voters in the United States believe that an inheritance tax will affect them when it actually does not… so because there is poor understanding , there would be very little political support for these new taxes.” “These buyers may not be happy to spend more, but they also know it becomes more certain when somebody owns that GCB, they are part of the elite.”
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