Singapore’s Budget: 3 Ways to Raise Funds Without Taxes

Relaxing the balanced budget rule would allow the government to run modest deficits during periods of high expenditure, particularly when investing in long-term infrastructure or addressing demographic challenges. For instance, healthcare spending has seen a significant rise, with projections indicating that national health expenditure could increase from $22 billion in 2018 to $59 billion by 2030. This surge is primarily due to an aging population, necessitating substantial investments in medical facilities, eldercare services, and related infrastructure.

By permitting a controlled deficit, Singapore can finance these essential services without immediate tax hikes. This approach aligns with practices in other developed nations, where strategic borrowing is utilized to fund critical public services and infrastructure projects. It's essential, however, to implement strict fiscal oversight to ensure that any deficits are sustainable and that borrowed funds are directed towards projects with long-term benefits.

While this substantial levy aims to cool the property market and ensure housing remains accessible to Singaporeans, there is potential to further increase property taxes on foreign buyers, particularly those purchasing high-value properties. Implementing a progressive tax structure that imposes higher rates on luxury real estate acquisitions by non-residents could serve dual purposes: generating additional revenue and discouraging speculative investments that drive up property prices.

However, it's crucial to balance this approach to avoid deterring genuine long-term investors who contribute positively to the economy. Careful calibration of tax rates and clear communication of policy objectives can help maintain Singapore's attractiveness as an investment destination while ensuring that the local population's housing needs are prioritized.

One strategy to increase revenue without raising the GST rate is to lower the threshold for GST exemptions, thereby broadening the tax base. This means that more goods and services would become taxable, increasing government revenue. For example, extending GST to include digital services and low-value imported goods, which have traditionally been exempt, could capture a growing segment of the economy.

While this approach could generate additional funds, it is essential to consider its regressive nature, as lower-income households might bear a disproportionate burden. To mitigate this, the government could enhance targeted assistance programs, such as the GST Voucher scheme, to support vulnerable groups. This ensures that the revenue base is broadened without unduly impacting those least able to afford it.