Many people have pointed out that migrating to western countries will make you liable to high taxes. 40-50% tax or higher are often told to us to make our decisions more prudent. Singapore has low personal tax. Most of us pay about 7% personal income tax.
But lest we forget, when HDB used to be tax free, it is now taxed. HDB flat is not “yours”. Check your property agreement. You are a “lessee”, not “owner”. The first charge of your flat goes to CPF Board. What does this mean? It means that you as a tenant are paying property tax while the owner who is leasing it to you (your HDB flat cost is the rental fee) is not paying the property taxes. And the GST on top of conservation taxes, etc.
Ok still now very high taxes compared to the 40-50% tax rates of western countries.
But did you know you are paying 36% of your monthly wage to CPF? This money can be argues as not being a “tax” because the money is held in trust for you. And you can withdraw it later. Oh wait, no you cannot withdraw it unless you meet certain terms…
But can CPF be considered a tax? Yes it might qualify. It is taken away from you and used to “subsidise” your retirement. Something taxes are used for. Like 40-50% tax to give you free education, free healthcare, and old life pension (something like retirement subsidy).
But wait! CPF does not give you free things! But at 36% and adding your personal income tax of 7% you are paying 43% taxes! At 43% tax and not getting free education, healthcare, are we paying high taxes and not getting what other countries paying comparative taxes are getting?
So depending on whether you want to see CPF as a tax (with extra expenditure to hire people to man a separate “tax” office), you will be happy or shocked at what you have been paying.
We might want to have a proper discussion on whether CPF is a tax or not.
Pallavi