SINGAPORE (Feb 19): Ahead of the Budget Speech on Feb 19, the market is abuzz with speculation on which taxes will be raised and which will not.

Indeed, the government itself has been hammering home the point over the past year that taxes will need to rise to fund its sharply rising expenditures to reshape the economy, as well as soaring healthcare costs as Singapore’s population ages. The need for higher taxes was a key theme of last year’s Budget Speech and Prime Minister Lee Hsien Loong’s speech at the People’s Action Party convention in November.

By 2020, one in six Singapore citizens will be aged 65 years and above; by 2030 that figure is estimated to be one in four. In FY2017, budgeted healthcare spending increased 9% to $10.7 billion, making it the third-largest expenditure item after defence and education. In an interview with The Straits Times in January, Deputy Prime Minister Tharman Shanmugaratnam said, “Healthcare is the biggest challenge for the future of social spending. It’s the fundamental reason why we need to raise more revenues.”

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