Why Is There Little Tax Evasion in Singapore? Why Do Most People Pay Taxes to the State?

Taxation is by which governments finance their expenditure by requiring costs on corporate entities and citizens. The government uses tax to discourage or encourage certain economic choices. Example, reduce in taxable personal or household rent by the amount paid as interest on home contract loans results in greater construction activity and generates more jobs. An essential function of taxation is to support government expenditures. Different justifications and explanations for taxes have offered throughout history. New taxes were used to support ruling classes, raise armies and build defenses. Often, the authority to tax stemmed from a divine or supranational right. Taxes are significant source of revenue, and its collection is one of the most important functions performed by the state

Moving on from the strong legislation Mr. Lee put into place to allow Singapore to get independence, stringent laws were also part of how Mr. Lee helped Singapore overcome some of its disadvantages. Every westerner in current times has heard of the absurd laws aimed at making Singapore being overly clean. Chewing gum was banned in 1992 because vandals disrupted public transport systems by sticking their gum on the doors of trains. This became more of a disadvantage as citizens could no longer chew gum nor bring food and drinks onboard any public transport network that was and till today is still commonly used by 70% of Singapore’s population. Adding to the chewing gum ban, Singapore imposed heavy fines on people who littered and contributed to pollution. Yet this law, which was put

Why do we need to pay taxes? Taxes are used to manage and develop the country including economic growth, education, health, transportation, public welfare, defense and maintaining peace in domestic, developing infrastructure. Moreover, taxes are the salaries of government officers. Taxpayers are the citizens who have an income. In some countries, citizens who have high income, usually pay higher taxes. On the other hands, those with low income may not be taxable at all. When the law imposes a duty to pay the taxes of the citizens and the business then, it must have been authorized to perform its obligations for tax evasion or tax avoidance as well as the filing of tax or payment of tax under the law.

Singapore faces two very crippling issues that are unlikely to be solved internally within the next few years, and as such are left with little choice but to rely on our foreign friends. Let’s look a little deeper.

 Singapore is both a city and a nation-state. This complicates matters. Most foreigners think of Singapore simply as a city. But most Singaporeans think of Singapore in national terms. This, by default, has had the unintended side effect of causing some fissures in the national fabric. It is possible to be both a global city and a nation-state. But it could be argued that the global city project pursued by Singapore has come at a heavy price for the nation-building project.

Globalization is the tendency of investment funds and businesses to move beyond domestic and national markets to other markets around the globe, thereby increasing the interconnectedness of different markets. It not only increases international trade but also cultural exchange. Globalisation touches all aspects of a nation, be it economic, political, or sociocultural. The main objectives of globalization include – incorporating all the people from different worlds into a single global society which improves communication and persuades foreign companies to invest in the country which will bring revenue and improve the economy (Scholte, 1997). The country that will be discussed in this essay is Singapore which is a wealthy city state in south-east Asia with a population of 5,888,926 as on July 2017(est). Once a British colonial trading post, today it is a flourishing global financial hub and known as one of Asia's economic "tigers". Singapore has perfectly embraced a capitalist economy where the state is controlling all the stakes in companies. Also, because of the highly free market there are more than 7,000 different business companies in Singapore and the Port of Singapore is the busiest since the opening of Suez Canal which helps to increase import and export. The major success of Singapore is because of its strategic location and natural harbour from which 40% of the world maritime trade passes (BBC Report, 2017). With a GDP of $297 billion (2016 est.), Singapore has

Singapore sacrificed civil liberty for the sake of economic development. There is no doubt economic development is important to maintain the national strength and reputation of a country or a city, however Singapore is not worthy for being an authoritarian city. Everything was restricted, mainstream media under government supervision monopolized media industry; citizens would face harsh penalties if they accidentally done something wrong—even chewing gum were banned in Singapore. Living under such kind of society, I don’t think the Singaporeans will feel happy with their life—their access and freedom to obtain information and express views were deprived, even the Internet is free but lawsuits are waiting for the netizens once they posted materials regarded as ‘illegal” by the

Singapore is a high income economy of GDP $307.9 and $55,150 per capita income as of 2014. According to the World Bank reports Singapore

Some interviewees put it down to the influence of the Singaporean government on the corporate sector – the former has inclined towards forward planning and orderly action in shaping the country’s success to date. This influence has also shaped the country’s education system, which undoubtedly influences the paradigm of many Singaporean business leaders.

Tax evaders are punished with criminal charges and considerable penalties in mostly all developed countries, although multiple factors impact the efficiency of tax administration and subsequently the persecution of this crime. One of the major problems is for example corruption of tax

Tax systems define the terms under which taxpayers interact with governments. As with other laws and regulations, such terms may be deemed either fair or unfair under a given standard. The predominant source of income for millions of U.S. taxpayers is wage, salary, or self-employment income. Thus, tax policies related

3 4 11 FOREWORD INTRODUCTION - Getting to know Singapore OVERVIEW OF LEGAL ENVIRONMENT - Legal Framework - Handling Civil Disputes - Employment - Immigration - Competition Act - Singapore's Free Trade Agreement (FTAs) STARTING A BUSINESS BANKING RELATIONSHIP IN SINGAPORE - Introduction to the Financial Landscape in Singapore - Banking in Singapore - Business Credit Facilities - Business Protection TYPES OF BUSINESS ORGANISATIONS - Sole Proprietorships and General Partnerships - Limited Liability Partnerships - Limited Partnerships - Companies - Joint Ventures - Foreign Companies - Representative Offices - Incorporating a Company - Annual Requirements for

The Republic of Singapore celebrated its 42 years of independence in year 2007. Situated at the southern tip of Malaysia, Singapore currently holds a population of 4.68 million as of June 2007. At 704.0km2, it is ranked 4th in the world for its population density. During the past four decades, the economy as measured by real Gross Domestic Product (GDP), multiplied by over 20 times (Ghesquiere, 2007, p.11). As a small and extremely open economy, Singapore long term survival is very much dependent on the ability to maintain its viable position and remain afloat in the sea of global competition (Mun Heng et al, 1998, p.14).

The effect of these provisions is to make a taxpayer liable to taxation. In reality, tax is a creation of statute and there is no of common law or equity that makes a man liable to tax. Therefore, from time to time whenever a dispute arises between the relevant tax authority and the taxpayer, there is a need to establish a judicial construction of any particular provision of a tax statute. In construing the words of a statute, the onus is on the tax authority to prove the intention of the legislature from the wordings of the statute. Where the

(Financial Services and the Treasury Bureau, 2006). As the Government tax revenue are mainly depends on Profit tax, Salary tax and Stamp Duties, which are nearly 90 percents of the total tax revenue, resulting that Government financial structure become unhealthy. (Hong Kong Inland Revenue Department, 2015). Moreover, the tax revenue is also fluctuated. Profit tax contribute around 45 percents of the total revenue collected (HKIRD,2015), is greatly influenced by the economic environment, and which shown after the financial crisis that Hong Kong tax revenue drop 4.6% in 2008-2009 and 6.5% in 2009-2010.(HKIRD,2010).