The government of Singapore imposes a much lighter tax burden on the economy compared to the majority of other developed jurisdictions.
According to Temasek Holdings Chief Executive Ms Ho Ching, on average, governments of other developed countries on average collect more than 30% of their GDP from taxes. Scandinavian countries like Denmark have a high tax burden of almost 50%. Meanwhile, even with its sovereign wealth fund from oil and gas, Norway has a tax burden of over 40%.
In the United States, taxpayers do not have only a federal tax burden, but also municipal and state taxes as the government’s expenditure is over 40% of the country’s GDP. Hong Kong, a developed economy in Asia, does not spend any money on defence, and has government expenditures of over 18% of GDP.
The Singapore government collects about 15% of the country’s GDP in taxes. Even though this percentage was substantially higher, at about 20% circa 2000, it has fallen as a result of faster economic growth than government expenditure.
Ms Ho Ching stated:
‘It seems as though the Government in Singapore is quite lenient, having a much lighter tax burden than most other developed economies, no?’