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Higher income tax cap will benefit few

Finance minister: raising $2,000 cap would also significantly impact on govt revenue. -ST

Thu, Feb 05, 2009
The Straits Times

RAISING the $2,000 cap for personal income tax rates would benefit only a very small group of taxpayers and significantly impact on Government revenues, said Finance Minister Tharman Shanmugaratnam in Parliament on Thursday.

It would also mean having to reduce the 20 per cent tax rebate to only 8 per cent for taxpayers.

Responding to calls from backbenchers for the 20 per cent personal income tax rebate, capped at $2,000, to be raised to help boost spending, Mr Tharman gave two reasons for the cap.

Use elasticity concepts