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Why Iras should review formula for property tax
MR PAUL Chan ('Adopt fairer tax system for owner-occupiers'; Jan 23) is right in advocating a new and fairer formula for property tax.
The current method of tagging market value to rental value is grossly unfair to owner-occupiers, and my personal experience is a good example.
When we experienced the worst year of economic growth in 2009, the property tax went down by only 23.5 per cent from that in the preceding, pre-crisis year.
Yet the same tax shot up by a whopping 98 per cent last year, which meant the property tax paid in 2010 was 50 per cent higher than that in the 2008 pre-crisis year.
And the economy has not even recovered to pre-crisis levels.
There were also four adjustments made between 2007 and last year, three of which were increases and one, a decrease.
Is there a need for such frequent adjustments in tax rates?
All the above reinforces the view that when times are bad, the Inland Revenue Authority of Singapore (Iras) returns less than it should, but when times are good, it takes back a lot more than it deserves.
The efforts by Iras to introduce adjustments and inform taxpayers could have been saved if a different formula is used.
As an owner-occupier, I do not lose or benefit from economic changes or changes in rental value, so why is my property tax not reflecting that?
Thian Tai Chew
MR PAUL Chan ('Adopt fairer tax system for owner-occupiers'; Jan 23) is right in advocating a new and fairer formula for property tax.
The current method of tagging market value to rental value is grossly unfair to owner-occupiers, and my personal experience is a good example.
When we experienced the worst year of economic growth in 2009, the property tax went down by only 23.5 per cent from that in the preceding, pre-crisis year.
Yet the same tax shot up by a whopping 98 per cent last year, which meant the property tax paid in 2010 was 50 per cent higher than that in the 2008 pre-crisis year.
And the economy has not even recovered to pre-crisis levels.
There were also four adjustments made between 2007 and last year, three of which were increases and one, a decrease.
Is there a need for such frequent adjustments in tax rates?
All the above reinforces the view that when times are bad, the Inland Revenue Authority of Singapore (Iras) returns less than it should, but when times are good, it takes back a lot more than it deserves.
The efforts by Iras to introduce adjustments and inform taxpayers could have been saved if a different formula is used.
As an owner-occupier, I do not lose or benefit from economic changes or changes in rental value, so why is my property tax not reflecting that?
Thian Tai Chew
