Member of Parliament Saktiandi Supaat has called for a significant recalibration of Singapore’s tax structure, suggesting that the personal income tax exemption threshold be raised to S$30,000.
Speaking on the first day of the Budget 2026 debate on February 24, Mr. Saktiandi argued that the current S$20,000 floor, which has remained unchanged since 2002, is increasingly out of step with modern economic realities.
Addressing “Bracket Creep” for Middle-Income Earners
The Bishan-Toa Payoh GRC MP, who chairs the Government Parliamentary Committee for Finance, Trade, and Industry, noted that while median incomes and the Goods and Services Tax (GST) have risen over the last two decades, the tax-free threshold has stayed stagnant.
This stagnation has led to “bracket creep,” where lower and middle-income earners find themselves within the tax base not because of a significant increase in wealth, but simply because the system has not been updated to reflect inflation and wage growth.
“In real terms, its value has eroded,” Mr. Saktiandi stated. He proposed raising the threshold to S$25,000 or S$30,000 to provide “meaningful relief” and allow families to retain more savings for asset building.
Balancing Fiscal Discipline with Social Mobility
To ensure the government remains fiscally responsible, Mr. Saktiandi suggested that any loss in revenue from raising the threshold could be offset by calibrated adjustments at higher income tiers.
He emphasized that as Singapore’s revenue mix shifts more toward indirect taxes, it is vital to strengthen the progressivity of the personal income tax system.
Proposal for “Singapore Opportunity Account”
Beyond tax reforms, Mr. Saktiandi highlighted the growing gap between wealth and income inequality. He proposed the creation of a “Singapore Opportunity Account” to help lower-income households build capital.
The proposed framework includes:
- Initial Government Stake: A modest starting sum provided by the state.
- Progressive Top-Ups: Additional support targeted at low-income families.
- Restricted Use: Funds would be earmarked for education, skills upgrading, or housing enhancements.
“In a mature economy like ours, the central question is no longer simply GDP growth,” Mr. Saktiandi said. “What matters is whether growth translates into mobility, fairness, and confidence across generations.”
The Budget 2026 debate continues this week, with over 60 MPs expected to speak before Prime Minister Lawrence Wong delivers his roundup speech.
