Better to deal with living costs directly than using tax tool

[SINGAPORE] Changing the tax system is neither the only nor the best way to tackle social inequality. It may be more effective to address directly the rising costs of living that exacerbate income gaps, said participants at a pre-Budget roundtable organised by BT.

While there have been suggestions to raise the top marginal personal income tax rate or broaden the income bracket for which the top rate applies, KPMG head of tax Tay Hong Beng and EY head of tax Chung-Sim Siew Moon both think such moves would be "very difficult".

That could send the wrong signal to the global talent that Singapore still hopes to attract, especially since comparisons are often made between Singapore's top marginal personal tax rate of 20 per cent and Hong Kong's 17 per cent.