Thursday, November 16, 2006
[RealEdge] BT Letters : Govt land sale proceeds should be included in Budget
| Published November 16, 2006  | |
| LETTER TO THE EDITOR | |
| Govt land sale proceeds should be included in Budget SINGAPORE'S shift from direct taxation to indirect taxation through GST and other consumption taxes is the right way to go to keep Singapore competitive and relevant in a highly globalised world. I agree with your editorial 'Securing Singapore's revenue position' (BT, Nov 15) that raising the GST rate is a realistic alternative to increase the government's coffers to meet projected increases in social spending. I am happy to hear that the government is planning to spend more to meet the demands of an ageing population. However, with due respect, I am not convinced that the tax increase should be effected now or in many years to come given that our expenditure on social services is so low by world standards. PM Lee Hsien Loong said the government is planning to change the Constitution to allow realised capital gains to be included as revenue for the purpose of government drawdown for expenditure. May I ask the government to look at all other substantial sources of income that go straight into our national reserves. Take the proceeds of sale of stateland for instance. Billions of dollars are collected each year. This sum is not included as revenue in our Budget. Why? I raised this when I was an NMP (during 1992-94). The answer given then and now was that the sale of land is not an income. It is a transfer of a tangible state asset to cash. Our so-called sale of land is on a leasehold basis, mostly on 99 year tenure for commercial and residential purposes while industrial and recreation usage come with shorter tenures of 60, 30, 15 and or even shorter terms. The government spends much money to turn raw land into productive land. The sums spent each year for infrastructure is charged into the Budget, yet when the land is sold as a result after enhancement, the income is not included as revenue. I see it as a matter of accounting. My suggestion then was for the sums collected, if we want to be prudent, to be 'amortised' over the lease tenure - for example, a $99 million landsale income on a 99 year tenure would mean a $1 million income per year for 99 years. Hong Kong, as cited by PM Lee Hsien Loong as a primary competitor, includes land sale proceeds as a key source of its income. Take Marina South land for easy reference. The government reclaimed the land, spent further billions on infra structure and has now started selling the land. It is not equitable to on the one hand charge out the expense and not include the sales proceeds thereafter. If we do not want to include the proceeds, then let us have a separate book for land and infrastructure expenditure. That way, we would have sufficient money left for other purposes. Chia Shi Teck |
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