<p>Income tax is not the only taxation.</p>

<p>And taxation is not the only source of revenue that pays for those services.</p>

<p>You have to look far beyond income tax rates.</p>

<p>So don't forget to take into account all the other taxes, public transport fares, supplementary health care costs, other payments (at point of use or elsewhere), as well as any other revenues from trading by state enterprises, including profits from the Sovereign Wealth Funds (GIC/Temasek/...).</p>

CC BY-SA 3.0
2015-12-30T10:47:12.137Z
I do not think this is a good answer (yet), since it does not explain "How" Singapore compensates for the relatively low income tax. You talk about other sources of income, but do not specify which source it is in the case of Singapore.
HRSE
CC BY-SA 3.0
2015-12-30T15:54:52.777Z
All of them. They're included because AFAIK Singapore uses all of them.
410 gone
CC BY-SA 3.0
2015-12-30T17:16:23.100Z
Could you describe how much they contribute to the ability to provide public services? Sure, Singapore probably uses all of them, but how much do they matter?
user69715
CC BY-SA 3.0
2015-12-30T07:06:41.967Z
2015-12-30T07:06:41.967Z
410 gone
<p>According to global economy.com government spending in Singapore is about 10% of GDP. So absent of taking debt the overall tax rate would have to be the same. This means that the services aren't likely public but private, or perhaps are very selective. Also, their public sector might be a lot more efficient giving more bang for the buck, or at least focusing in services instead of welfare schemes, which are generally speaking very expensive. Indeed it seems that most social insurance is done privately in Signapore. Finally, the country is 3rd richest nation in the world, which means 10% can go farther than someplace else.</p>

CC BY-SA 3.0
2016-01-01T16:19:37.683Z
2016-01-01T16:30:14.373Z
2016-01-01T16:30:14.373Z
Dole
<p>Government's sources of income does not comprise solely of income tax, but includes:</p>

<p>-indirect tax</p>

<p>-other direct taxes</p>

<p>-government bond selling</p>

<p>-foreign aid</p>

<p>-tax from tariffs</p>

<p>-profits from public corporations</p>

<p>-corporal fines</p>

<p>and a whole list of others</p>

CC BY-SA 3.0
2015-12-30T19:48:21.240Z
How do the items in your list apply in the case of Singapore? For example, is Singapore receiving foreign aid?
Herr K.
CC BY-SA 3.0
2015-12-31T01:39:51.567Z
@HerrK. it's likely that they're self sufficient and so will not be in need of foreign aid, I included it just to make a point about what the government revenue would potentially consist of. As for the Singapore question, that would need a bit more of research
tsp216
CC BY-SA 3.0
2015-12-30T14:35:47.217Z
2015-12-30T14:35:47.217Z
tsp216
<p>Singapore has a relatively low personal income tax rate. Somebody who earns $80,000 after deductions only pay 3,350 in taxes, or about 4% effective rate (<a href="https://www.iras.gov.sg/irashome/Individuals/Locals/Working-Out-Your-Taxes/Income-Tax-Rates/">see 2012-2016 tax table</a>). 80,000 is already well above the gross median income in Singapore, which is 3,770 per month in 2014 (<a href="http://stats.mom.gov.sg/Pages/Income-Summary-Table.aspx">source</a>). </p>

<p>Despite, this Singapore is well known for its first-world public services, including public transportation, education, security, public housing and utilities. Personally I've lived there and I enjoyed the level of public services that otherwise can only be observed in countries with much higher taxation than 4% (e.g. United States, Canada or Western European countries) or countries that rely on oil revenues thus eliminating the need for taxation (e.g. Gulf countries). I don't know how to prove this with hard data, but taking a cursory look at <a href="https://en.wikipedia.org/wiki/International_rankings_of_Singapore">International rankings of Singapore</a> can probably convince you that this is the case.</p>

<p>How is this possible? Absent 'free revenue' such as oil, isn't high level of taxation necessary to fund such high level of public service?</p>

<taxation><public-economics>
How is Singapore able to provide first-world public services, given its low income tax rate?
user69715
# How is Singapore able to provide first-world public services, given its low income tax rate?

(Asked by: username_0 on 2015-12-29)

Singapore has a relatively low personal income tax rate. Somebody who earns $80,000 after deductions only pay 3,350 in taxes, or about 4% effective rate ([see 2012-2016 tax table](https://www.iras.gov.sg/irashome/Individuals/Locals/Working-Out-Your-Taxes/Income-Tax-Rates/)). 80,000 is already well above the gross median income in Singapore, which is 3,770 per month in 2014 ([source](http://stats.mom.gov.sg/Pages/Income-Summary-Table.aspx)).

Despite, this Singapore is well known for its first-world public services, including public transportation, education, security, public housing and utilities. Personally I've lived there and I enjoyed the level of public services that otherwise can only be observed in countries with much higher taxation than 4% (e.g. United States, Canada or Western European countries) or countries that rely on oil revenues thus eliminating the need for taxation (e.g. Gulf countries). I don't know how to prove this with hard data, but taking a cursory look at [International rankings of Singapore](https://en.wikipedia.org/wiki/International_rankings_of_Singapore) can probably convince you that this is the case.

How is this possible? Absent 'free revenue' such as oil, isn't high level of taxation necessary to fund such high level of public service?

**Tags:** taxation, public-economics

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## 3 answers

### Answer by username_1 on 2015-12-30. Score: 1

Income tax is not the only taxation.

And taxation is not the only source of revenue that pays for those services.

You have to look far beyond income tax rates.

So don't forget to take into account all the other taxes, public transport fares, supplementary health care costs, other payments (at point of use or elsewhere), as well as any other revenues from trading by state enterprises, including profits from the Sovereign Wealth Funds (GIC/Temasek/...).

> **Comments:**
> **username_2**: I do not think this is a good answer (yet), since it does not explain "How" Singapore compensates for the relatively low income tax. You talk about other sources of income, but do not specify which source it is in the case of Singapore.  
> **username_1**: All of them. They're included because AFAIK Singapore uses all of them.  
> **username_0**: Could you describe how much they contribute to the ability to provide public services? Sure, Singapore probably uses all of them, but how much do they matter?  

---

### Answer by username_3 on 2016-01-01. Score: 1

According to global economy.com government spending in Singapore is about 10% of GDP. So absent of taking debt the overall tax rate would have to be the same. This means that the services aren't likely public but private, or perhaps are very selective. Also, their public sector might be a lot more efficient giving more bang for the buck, or at least focusing in services instead of welfare schemes, which are generally speaking very expensive. Indeed it seems that most social insurance is done privately in Signapore. Finally, the country is 3rd richest nation in the world, which means 10% can go farther than someplace else.


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### Answer by username_4 on 2015-12-30. Score: 1

Government's sources of income does not comprise solely of income tax, but includes:

-indirect tax

-other direct taxes

-government bond selling

-foreign aid

-tax from tariffs

-profits from public corporations

-corporal fines

and a whole list of others

> **Comments:**
> **username_5**: How do the items in your list apply in the case of Singapore? For example, is Singapore receiving foreign aid?  
> **username_4**: @HerrK. it's likely that they're self sufficient and so will not be in need of foreign aid, I included it just to make a point about what the government revenue would potentially consist of. As for the Singapore question, that would need a bit more of research  

---

