The reasons for abolishing the estate duty are:-
- Together with income tax, GST and estate duty, it is a triple whammy for taxpayers. You are subject to tax from the first day of work till one’s last day on earth.
- We have a lopsided exemption limit of $600,000 for movable assets against exemption up to $9mio for residential property. This lopsidedness would ensnare many middle-income households to be liable for estate duty.
- Will the existence of the estate duty discourage wealthy retirees to settle in Singapore? Maybe. Maybe not. If the tax revenue from this source is relatively insignificant, why risk it?
Why Govt’s hesitation to remove the tax?
- Allow me to speculate.
- The Govt could be due to collect some real monies from the estates of tycoon Khoo Teck Puat and ex-OUB banker Lien Ying Chow. While last year’s estate duty collection maybe a “mere peanut” amount of $80mio, the coming years of rapidly aging Singapore should “help” to raise the collection figures on this front.
- Alternatively, the Govt could be too busy to dedicate resources to review this area that affect only a minority but the very rich few.