Letter from Joseph Ang
Under the existing HDB policy, singles are not allowed to buy or rent flats directly from the Housing and Development Board (HDB), unless they partner with another single person and apply under the joint-singles scheme. In times of such economic uncertainty, when the economy has not fully rebounded, should such a policy be re-visited, so that singles can remain independent and maintain their sense of dignity?
I hope HDB will re-consider this policy and allow individual singles to rent or buy directly from HDB with minimal waiting time between application and allotment of flats (3 – 6 months at most). The sense of security of having roof over the head is very important to all Singaporeans – whether they choose to marry or remain single.
I personally know of a number of cases where singles rent from the open market as their extended family is not able to accommodate them for various reasons both personal and economic. The open-market room rental which is $450 per month, is very high to a single who is earnings may be limited. Many usually will suffocate for having to pay for public transportation, meals, and other daily needs, on top of the rent from the open market. And what’s worst is they don;t know where to go for help. The families in crisis can go to the family service centres, but where do the singles go to?
Being single is by no means easy, but it is nevertheless a lifestyle we have chosen for ourselves.
While I appreciate the pro-family policies of the government, the government should not forget singles in the process of being pro-family. Singles after all, do contribute to the economy of Singapore as well. Despite this, we are discriminated as ‘third-class’ citizens, and treated worse than a foreign worker, who at least has a dormitory to go to at the end of his hard day’s work.
With only a single income (as compared to at least double incomes in a family) and the ever rising valuations and cash-over-valuations, many singles will find it extremely difficult to buy a HDB flat from the open market.
Of course, HDB has the joint-singles policy for HDB rental flats; but what happens if a single person is not able to find another suitable person to co-share the rental flat with him? Should he be homeless because of this?
I personally know of quite a number of singles who are already at their wit’s end. Most are earning less than $1700 per month. How can they survive if they continue to rent from the open market? What about the singles who earn even lesser?
The newspapers reported recently that there are two block of flats made available for the foreign workers who will be coming here – presumably to work in the Integrated resorts. It does not make sense that foreigners will have ready HDB flats to move in to when they come to Singapore, but a single Singaporean like me is denied affordable housing.
The government should stop only talking about the ‘Singaporean first’ policy, but more importantly make it a practice – whether they be in a family or are just singles by choice!
Joseph Ang
Monday, February 1, 2010
Crackdown on Tax Avoidance
America is suffering a big budget deficit. It is not collecting enough taxes to pay for the cost of government and the social programs. The deficit is partly due to the weak economy, which reduces the tax revenue and the cost of the economic stimulus.to boost the economy.
An important contributing factor (which the Obama Administration is now targeting) is the tax avoidance by American companies which use a variety of ways to avoid tax, using "tax vehicles" and taking advantage of tax loopholes. They shift their profits to countries with low tax rate, including Singapore.
By reducing our income tax rates to attract these companies, Singapore has to introduce the Goods & Services Tax to make up this shortfall. It has its other negative consequences for the people and for the cost of doing business. GST is another layer of tax and is wasteful and costly to administer.
America and other developed countries are taking action on the tax avoidance. While Singapore will lose its value as a tax hub, I believe that it is better to have a fairer world, and countries do not try to compete on offering "tax incentives" to businesses to reduce or avoid paying tax.
I hope that Singapore can go back to the days of higher income tax and removal of the wasteful Goods & Services Tax (GST)
Tan Kin Lian
An important contributing factor (which the Obama Administration is now targeting) is the tax avoidance by American companies which use a variety of ways to avoid tax, using "tax vehicles" and taking advantage of tax loopholes. They shift their profits to countries with low tax rate, including Singapore.
By reducing our income tax rates to attract these companies, Singapore has to introduce the Goods & Services Tax to make up this shortfall. It has its other negative consequences for the people and for the cost of doing business. GST is another layer of tax and is wasteful and costly to administer.
America and other developed countries are taking action on the tax avoidance. While Singapore will lose its value as a tax hub, I believe that it is better to have a fairer world, and countries do not try to compete on offering "tax incentives" to businesses to reduce or avoid paying tax.
I hope that Singapore can go back to the days of higher income tax and removal of the wasteful Goods & Services Tax (GST)
Tan Kin Lian
Filing my first GST return
I "volunteered" to be a GST-registered business. I had to file my first GST return by end January (deadline has since passed). I had a difficult time.
I had a lot of trouble to figure out the complexity of classifying my sales into three categories - taxable, zero-rated, exempt. I also had to figure out which of my purchases are allowable to be deducted. I had to fill in figures into 13 boxes. They are explained in a 8 page Guide.
Finally, I got the figures sorted out. I tried to lodge my return last week, before the deadline (failing which I had to pay a fine).
I found that I could not file my GST return as IRAS insisted that it has to be done by e-filing. Sorry, I need to apply for an "access code" which would be sent by mail to my registered office in 4 days time. The mail did not arrive and I had to call IRAS to check. Finally, it arrived at my registered office , which is different from my operating office (sorry, cannot send by e-mail for "security reasons"). I had to authorize my registered office staff to open my mail and send the access code to me by SMS. Forget about security!
I tried to submit my GST return today, and it was "hell". I had to navigate through a complicated IRAS website. I found "myTaxPortal", which asked for my NRIC, company GST ID and IRAS PIN. I tried a few combinations and failed. I had to call the IRAS helpline.
Well, you know about IRAS helpline. You had to listen to a few minutes of automated messages, before you get to talk to a person. Often, you are unsure if you can ever get to talk to a person!
Finally, I talked to a person. She guided me through the complicated IRAS maze (sorry, website). It was impossible for an ordinary person, like me, to ever get through this maze on my own. She led me through one click and another. Finally, she said, "Can you click on the form called GST return". There was no such form.
Sorry, she had to check and call me back. She did. Another round of guiding through the IRAS maze. Got stuck again. A document that was supposed to be there could not be found. She said that it must be "intermittent" problem.
I asked her, why can't IRAS allow the taxpayer to fill up a form and fax it to IRAS? Surely, it is not expensive for IRAS to employ people (and there are many unemployed people keen to have a job) to do data entry? Why force the taxpayer to go through this type of trouble in submitting a GST return?
IRAS insisted that a volunteer GST taxpayer has to attend a 3 hour course. I was registered for the next course due in a few days time (i..e. after the deadline for submission has passed). I could not attend an earlier course as it was fully taken up.
I hope that the government officer who monitors this blog will take this feedback and pass it to senior people in IRAS and Ministry of Finance.
Tan Kin Lian
I had a lot of trouble to figure out the complexity of classifying my sales into three categories - taxable, zero-rated, exempt. I also had to figure out which of my purchases are allowable to be deducted. I had to fill in figures into 13 boxes. They are explained in a 8 page Guide.
Finally, I got the figures sorted out. I tried to lodge my return last week, before the deadline (failing which I had to pay a fine).
I found that I could not file my GST return as IRAS insisted that it has to be done by e-filing. Sorry, I need to apply for an "access code" which would be sent by mail to my registered office in 4 days time. The mail did not arrive and I had to call IRAS to check. Finally, it arrived at my registered office , which is different from my operating office (sorry, cannot send by e-mail for "security reasons"). I had to authorize my registered office staff to open my mail and send the access code to me by SMS. Forget about security!
I tried to submit my GST return today, and it was "hell". I had to navigate through a complicated IRAS website. I found "myTaxPortal", which asked for my NRIC, company GST ID and IRAS PIN. I tried a few combinations and failed. I had to call the IRAS helpline.
Well, you know about IRAS helpline. You had to listen to a few minutes of automated messages, before you get to talk to a person. Often, you are unsure if you can ever get to talk to a person!
Finally, I talked to a person. She guided me through the complicated IRAS maze (sorry, website). It was impossible for an ordinary person, like me, to ever get through this maze on my own. She led me through one click and another. Finally, she said, "Can you click on the form called GST return". There was no such form.
Sorry, she had to check and call me back. She did. Another round of guiding through the IRAS maze. Got stuck again. A document that was supposed to be there could not be found. She said that it must be "intermittent" problem.
I asked her, why can't IRAS allow the taxpayer to fill up a form and fax it to IRAS? Surely, it is not expensive for IRAS to employ people (and there are many unemployed people keen to have a job) to do data entry? Why force the taxpayer to go through this type of trouble in submitting a GST return?
IRAS insisted that a volunteer GST taxpayer has to attend a 3 hour course. I was registered for the next course due in a few days time (i..e. after the deadline for submission has passed). I could not attend an earlier course as it was fully taken up.
I hope that the government officer who monitors this blog will take this feedback and pass it to senior people in IRAS and Ministry of Finance.
Tan Kin Lian
ST Online Forum: Hit hard by insurance policy termination
ST ONLINE FORUM
I BOUGHT three policies from Prudential for my children 15 years ago. Recently, due to a need for cash, I decided to terminate one of the policies.
To my shock and disappointment, the amount I am getting back upon surrendering the policy equates to less than 50 per cent of my contribution in the last 15 years.
I can understand if the early termination results in an 80 per cent return, but 50 per cent?
The customer service officer told me that given the crisis last year, policyholders did not have good bonuses and therefore the drop in value. So my questions are:
How can the year's bonus affect 50 per cent of my investment because a good bonus does not double my principal sum.
Is there an organisation in Singapore that ensures that policyholders are being protected?
As much as there are risks, what about those who have invested for 30 years hoping to get a good return only to be given the same answer?
Will the authorities please look into this so all of us who hope to retire well by investing in insurance policies will not lose a substantial amount of our hard-earned cash.
Sabrina Tan (Mdm)
MY COMMENTS
MAS should be the body that is responsible to look after the interest of consumers and make sure that they are fairly treated, especially on the declaration of bonus. I hope that MAS will ask Prudential to given an explanation and check if the explanation is acceptable. I am surprised that the cash value is only 50% after 15 years. It should have "broke even" by now.
MAS should not refer this matter to FIDREC. It should be investigated by MAS, as it is the core of the operation of the insurance company.
I BOUGHT three policies from Prudential for my children 15 years ago. Recently, due to a need for cash, I decided to terminate one of the policies.
To my shock and disappointment, the amount I am getting back upon surrendering the policy equates to less than 50 per cent of my contribution in the last 15 years.
I can understand if the early termination results in an 80 per cent return, but 50 per cent?
The customer service officer told me that given the crisis last year, policyholders did not have good bonuses and therefore the drop in value. So my questions are:
How can the year's bonus affect 50 per cent of my investment because a good bonus does not double my principal sum.
Is there an organisation in Singapore that ensures that policyholders are being protected?
As much as there are risks, what about those who have invested for 30 years hoping to get a good return only to be given the same answer?
Will the authorities please look into this so all of us who hope to retire well by investing in insurance policies will not lose a substantial amount of our hard-earned cash.
Sabrina Tan (Mdm)
MY COMMENTS
MAS should be the body that is responsible to look after the interest of consumers and make sure that they are fairly treated, especially on the declaration of bonus. I hope that MAS will ask Prudential to given an explanation and check if the explanation is acceptable. I am surprised that the cash value is only 50% after 15 years. It should have "broke even" by now.
MAS should not refer this matter to FIDREC. It should be investigated by MAS, as it is the core of the operation of the insurance company.
Car loan for 60 months
Dear Mr. Tan,
I am responding to your post on your blog - which is always a great pleasure to read and to follow, by the way.
Date of offer: July 2009
Financial Institution: (insurance company)
Amount of loan: $55,000
Purpose of loan: car loan
Number of repayments: 60 months
Monthly repayment: $1,031 for 59 months, and $1,048 for the final month.
The interest rate which they quoted me was 2.5%, and I would like to find out what is the effective effective interest rate.
REPLY
The total amount that you have to repay is $61,877. After deducting the loan of $55,000, you are paying interest of $6,877 for the 5 years. This works out to a FLAT interest rate of 2.5% per year.
However, as the loan reduces over the period of 5 years, the effective interest rate is higher, at 4.73% per year. I consider this interest rate to be acceptable for a 5 year loan.
I am responding to your post on your blog - which is always a great pleasure to read and to follow, by the way.
Date of offer: July 2009
Financial Institution: (insurance company)
Amount of loan: $55,000
Purpose of loan: car loan
Number of repayments: 60 months
Monthly repayment: $1,031 for 59 months, and $1,048 for the final month.
The interest rate which they quoted me was 2.5%, and I would like to find out what is the effective effective interest rate.
REPLY
The total amount that you have to repay is $61,877. After deducting the loan of $55,000, you are paying interest of $6,877 for the 5 years. This works out to a FLAT interest rate of 2.5% per year.
However, as the loan reduces over the period of 5 years, the effective interest rate is higher, at 4.73% per year. I consider this interest rate to be acceptable for a 5 year loan.
Adopt a consistent approach
This simulation game shows that if you adopt a consistent approach in picking stocks, you will be able to get better results in the long run. There may be ups and downs in some years, due to volatility, but the consistency will produce positive results. Some good approaches are:
a) choose the stocks that perform well in recent years, as they are likely to continue to trend
b) choose low PE stocks as they are likely to revert to the average
These are theories that need to verified by practice. This simulation game allows you to try the theory over many years, and see if they work for the model. In real life, you also have to test the model that works well and stick to it.
Click here to try the simulation game on stock picking. Read the guides and share experiences of the Champions (i.e those who reach Level 9).
a) choose the stocks that perform well in recent years, as they are likely to continue to trend
b) choose low PE stocks as they are likely to revert to the average
These are theories that need to verified by practice. This simulation game allows you to try the theory over many years, and see if they work for the model. In real life, you also have to test the model that works well and stick to it.
Click here to try the simulation game on stock picking. Read the guides and share experiences of the Champions (i.e those who reach Level 9).
Foreign currency payments on credit cards
When I pay in a foreign currency by credit card, I trust that the bank will charge a fair conversion rate. But, I never spend the time to check on the conversion rate that they use. Someone told me that the conversion rate is rather high for the consumer. Do you have any information about this? Please share it.
Football on Pay TV
I am glad that Singtel and Starhub are working together on a joint bid for FIFA World Cup. I hope that they can reach an agreement with FIFA so that the World Cup can be broadcast to Singapore homes through both platforms. That would be good for soccer fans in Singapore.
If the operators and FIFA cannot agree on a fixed price, I suggest that they work on a percentage sharing of the revenue from each subscriber or an agreed amount per subscriber (to be paid to FIFA).
Perhaps, Singtel and Starhub can get together to discuss how to make the English Premier League available to many homes who are cuurrently on Starhub. Starhub has offered to do the broadcast for free. I hope that Singtel will take up this offer. It will avoid the pain to Singtel of installing so its new set top boxes to many homes, which is likely to cause a lot of technical and capacity issues.
Tan Kin Lian
If the operators and FIFA cannot agree on a fixed price, I suggest that they work on a percentage sharing of the revenue from each subscriber or an agreed amount per subscriber (to be paid to FIFA).
Perhaps, Singtel and Starhub can get together to discuss how to make the English Premier League available to many homes who are cuurrently on Starhub. Starhub has offered to do the broadcast for free. I hope that Singtel will take up this offer. It will avoid the pain to Singtel of installing so its new set top boxes to many homes, which is likely to cause a lot of technical and capacity issues.
Tan Kin Lian
Bubble in commodity funds
This article explains a potential bubble in commodity funds. It involves complex financial engineering, created by investment banks to earn a fee. This is similar to the debacle on the credit deriviatives. It is better to invest in indexed funds that invest directly in the underlying stocks. Derivatives should be avoided.
Lessons from Canada about banking
Read this report. Canada has a strong agency to product consumers on financial matters. This has kept Canada away from the mistakes made by other countries.
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