Singapore - Politics, government, and taxation

Singapore is a parliamentary democracy with a president as the constitutional head of state. The president plays a ceremonial role in the political life of the country and until 1991 was elected by the parliament. In 1991, the constitution was amended, allowing citizens to vote for their president in direct popular elections. Current president S. R. Nathan took office for a 6-year term in 1999. Singapore's unicameral (one house) parliament has 83 members elected by popular vote. Executive power rests with the cabinet, led by the prime minister who is responsible to the parliament.

Several political parties have been active since Singapore's independence in 1965. Five of these parties have a high profile and influence in the country. These are: People's Action Party (PAP); National Solidarity Party (NSP); Singapore Democratic Party (SDP); Singapore People's Party (SPP); and Worker's Party (WP). Unlike many neighboring countries, the Communist Party does not have mass support in Singapore, and there has been no violent confrontation with communists. The military has never been an influential force in the political arena of the country. Politically, Singapore has remained remarkably stable and nearly untouched by political violence since independence.

Since the end of World War II, the major issues shaping political competition in Singapore have been the promotion of political stability, economic growth, and maintaining a balance among the 3 main ethnic groups. The PAP came to power spreading an ideal of national consolidation, economic growth, and state paternalism. It has remained the country's dominant political force for the past 40 years, controlling parliament in every election since independence. The PAP's strong man, Lee Kuan Yew, became prime minister in 1959 when Singapore acquired self-governance, and retained this position until 1990. After his resignation, Goh Chok Tong, Lee's chosen successor, became the new prime minister. One of the unique features of Singaporean political development is the governing by a single party since gaining independence in 1965. This has led prominent human rights groups to criticize the Singaporean government over its failure to promote and protect the political and civil rights of its citizens.

Since the early 1960s, under the leadership of both Lee Kuan Yew and then Goh Chok Tong, the Singapore government has promoted a free-market and export-oriented economy. This policy has been successful and the country has experienced unprecedented economic growth and prosperity. Leading technocrats were able to capture major trends in technological change in the modern world and utilize the benefits of globalization. In 1992, as a member of the Association of South East Asian Nations (ASEAN), Singapore created a regional free trade zone , to be known as the ASEAN Free Trade Zone (AFTA). Singapore managed to minimize the negative effects of the oil crisis of 1979 and the Asian financial meltdown in 1997.

The country has continually attracted foreign direct investment and technological transfers from developed countries such as Japan and the United States. One of the important tools in the hands of the government has been its taxation policy and its initiatives. With few exceptions, capital gains are not taxed in Singapore. Both resident and non-resident companies are taxed at the same rate as the corporate tax rate, which stays at 25.5 percent. The typical withholding tax rate on interest payable to non-residents stays at 15 percent, but this could be reduced or even exempted by tax treaties in the future. A Goods and Services Tax (GST) was introduced in April 1994 at 3 percent, but was accompanied by compensatory reductions in direct taxation . Qualified employees may enjoy tax exemptions of 50 percent for up to S$10 million of stock option gains arising over a period of 10 years for stock options granted after June 2000.

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Aaron Banes
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Aug 11, 2019 @ 9:21 pm
thank you for this information, this has changed my life

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