For the first time ever, Singapore is expected to have as many people ages 65+ as under 15 this year. The Southeast Asian Nation’s demographic core now challenges the low-tax economic model which helped change Singapore from a port town to the financial hub it is today in a matter of decades.
Top government officials have suggested the need for increasing taxes to uphold future social spending and so, changes are expected as soon as the budget on Monday the 19th of February. Singapore has some of the lowest tax rates in the world however the citizens do not welcome higher taxes even though they would likely be better supported by the social spending.
The Institute of Policy Studies (IPS) highlighted that Singaporeans would prefer that the government dip into its national reserves than increase taxes according to a recent study.
However, according to economists, things will have to change in Singapore which has one of the lowest fertility rates and highest life expectancies in the world. Borderline increases to the likes of the goods and services tax in 2018 may be the start of a rethink in the long run.