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The introduction of wealth taxes would undermine Singapore’s position as a leading asset management center, according to financial advisers in the Southeast Asian city-state.
Singapore’s chief financial regulator touched on the subject of introducing potential wealth taxes to address growing inequalities, but such measures could have a significant impact on its appeal to high net worth individuals and families.
“If Singapore does [implement such wealth taxes], then this will seriously jeopardize our status as a wealth management center because a lot of people want to come to Singapore, mainly because we don’t have capital gains tax, ”said Steven Seow, founder and executive director of Singapore Consultancy, at Ignites. Asia.
Such taxes would not put Singapore in a “favorable” position relative to Hong Kong when it comes to attracting global wealth, Seow adds, noting that Hong Kong currently has no over-tax tax. values.
Desmond Teo, Singapore-based family-owned Asia-Pacific business leader and head of private taxation for the Association of Southeast Asian Nations at EY, told Ignites Asia that less than a consistent adoption of a wealth tax in all jurisdictions, and not just Singapore, would be “detrimental” to Singapore’s status as a financial center and a center for wealth management.
Ravi Menon, Managing Director of the Monetary Authority of Singapore, suggested the government could impose various wealth taxes, including a real estate gains tax or an inheritance tax, as a way to tackle wealth inequality. , while speaking at the Institute of Policy Studies, a Singapore think tank, on July 22.
Menon noted that wealth differentials were historically due to access to skyrocketing valuations in real estate investments in particular and he warned that Singapore risked increasing inequality if private house prices rose faster than housing prices. public, for example.
The MAS chief’s comments are the latest in a wealth tax debate that has been unfolding in the city-state since February, when then-finance minister Heng Swee Keat said he was “possible to revisit” the government’s approach to these policies.
Singapore’s status as a hub of wealth has grown in recent years, with a number of high profile billionaires reportedly setting up family offices in the market, including home appliance mogul James Dyson, the founder of the Chinese hotpot chain Haidilao Shu Ping, the co-founder of Google Sergey Brin and the founder of the hedge fund Ray Dalio.
Last year, the MAS revealed that there were around 200 family offices in Singapore, with total assets estimated at around $ 20 billion.
However, Covid-related travel restrictions have dampened interest in Singapore somewhat among wealthy people, with many choosing to postpone their move to the city-state for now.