According to an independent economics think-tank, Peterson Institute for International Economics (PIIE) in US Washington, the Singapore dollar is not as strong as it appears to be. The Singapore’s currency is manipulated by the government when it purchases huge amount of foreign assets to increase it’s currency strength. Backing these purchases are actually CPF money.
The US research institute referred to the CPF as a “high payroll tax”, instead of Singaporeans’ assets:
“Singapore’s manipulation derives primarily from its public pension system, which collects high payroll taxes from workers and invests them entirely overseas through a sovereign wealth fund to back future pension obligations.”
PIIE also reported that Singapore have about US$800 billion of official overseas assets, and in 2017 alone, the Lee Hsien Loong-controlled GIC, where he is Chairman, and his wife Ho Ching’s Temasek Holdings, where she is CEO, spent a total of S$125 billion.
The findings is one of the few accurate research that would truthfully report about the actual state of taxation in Singapore, which the Singapore government for decades have been propagandising and marketing the country as a “low income tax” nation.
In Singapore, any worker earning more than S$50 a month would be taxed CPF, by up to 37% (co-payment of 20% by employee and 17% by employer). With the low income paying a tax of 37%, Singapore have effectively the highest tax rates for the low income in the world. The CPF tax however applies to only Singaporean citizens and permanent residents.
Since Lee Hsien Loong took premiership in 2004, the CPF Minimum Sum have more than doubled from S$80,000 to S$166,000. Withdrawal Age was also increased from 55 years old to 63 years old, with further plans to increase further up to 71.