Member-only story
One of the realities of life is that nothing is free. In order to fund public services, pay government obligations, and provide for their citizens, governments tax the incomes of businesses and individuals within their jurisdiction. Depending on geographical serendipity, some countries benefit from having coveted natural resources that their government can leverage as a source of income with which to provide for their citizens.
Recognizing demographical changes that portend an inverted population pyramid — where a smaller working population supports a larger non-working elderly population — Singapore shifted from an income tax-based approach for government revenue to a consumption-based Goods and Services Tax (GST) approach in 1994. This shift diffused the burden of taxation across a larger segment of the population and is, in a sense, fairer as those who consume more (i.e. can afford more) contribute more.
Government Revenue
Not prepared to accept Singapore’s lack of geographical serendipity as fate, the government has diligently worked over the decades to overcome this disadvantage by building and turning our reserves into a natural resource to supplement government revenue. As a measure of the government’s success, in 2021, 50% of the NIRC (Net Investment Return Contribution) contributed approximately 19.5B to the…
