Thursday, August 23, 2012

Death and Taxes

Should we treat paying taxes not so much an obligation, indeed no a duty, but an act of charity. This is what a letter writer to Today suggested come days ago. Yet ironically, in that same paper, on the facing page, a letter writer wrote about how certain public servants are wasting tax-payers' money by engaging private law firms in their law suits.

At one level, I agree with the letter writer. As many would by now have found out, the personal tax bill for many this year is far far more than last year's. Last year was election year, so it would not take a Phd to figure out why. Yep, my tax bill has nearly doubled, not that my pay has increased by that quantum, mind you. And the last time I filed my tax returns online, I could not claim for some donations I made in the year of assessment simply because the organisation was not listed as one of the approved institution of public character (IPC). There wasn't anywhere on the screen form you could write it in. You could only select from a preset list. This in spite the fact that I have been donating to the same institution for 2 years prior to the last YA and the deduction had been allowed. I would like to think that I am honest, but I am penalised? Well, the Singapore IRAS is very efficient and, in a sense, ruthless, in extracting that pound of flesh, and then some, from its taxpayers. So when I thought about what the writer suggested, I wondered if I should write to IRAS to re-assess my income tax.

In a sense, the writer is correct. Taxes are a means to redistribute income and enable a government to govern for the common good. Even billionaire investor Warren Buffet famously said that the rich in America are not paying enough taxes, and that they should. Paying taxes to care for society is an ideal, an assumption that, as events in the last few months in Singapore have demonstrated, is far from the ideal. What with S$2,200 bicycles to patrol public parks, S$650 designer chairs for government officers' butts. Is it any wonder the ambivalence towards contributing to the public purse for the common good.

In any case, those who have the means - profitable businesses and wealthy individuals, routinely engage tax accountants to minimise their tax obligations. So why should the man in the street do any less in minimizing his own tax bill?

Death and taxes will remain dreaded facts of life. They are to be avoided at all cost, or for as long as possible.

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