Saturday, September 05, 2020

Free-Riding the Singapore Welfare System

Dealing with Free Riders 

The term "free-rider" is currently having its day on the Internet. As I've made a decision to many years ago to align more fully with our Capitalist system rather than the Political system, I think my actual aim is to find as many legitimate means to free-ride in Singapore, always put in slightly less to extract maximum benefits from the system.  

The truth is that the kind of moves I make are quite noob-level. An ordinary employee can use the following means to free-ride in Singapore today :

  • Open an SRS account, put in the maximum $15,300 every to get tax deductibles.
  • Inject $7,000 into you and your spouse's CPF-SA.
  • Take more public transport as it is running at a loss and funded by tax-payer money.
  • If you serve NS, use credits to buy New Balance running shoes. I even got a pair for my dad.
If you level up as an investor, you bring free-riding to a whole new level. Singapore is a welfare-state for the rentier. You can commit the following "tax atrocities" with no legal consequences :

  • Invest in securities as dividends do not flow into personal taxation numbers and are not accounted for qualifying for HDB ownership.
  • Buy REITs as REIT incomes do not even incur taxation at the corporate level when the REIT distributes 90% from rental proceeds.
I suspect incorporation will allow a person to level-up as a free-rider even further. I'm looking at the following schemes and studying them carefully and will consult a company secretary to make it high-priority for my business, do correct me if I am wrong : 
  • $200,000 of revenue does not attract taxes for the first three years.
  • Beyond the first $200,000, legitimate deductions for company expenses can be made. This is a 17% discount on cloud-hosting fees and software purchases which I already pay as an investment trainer. I can also buy an explicit PC or tablet to be used exclusively for work to free up my home PC resources.
  • I can pay myself a minimum salary to lower the tax burden more.  
  • If I hire a local worker, I can even get $30,000 under the Jobs Growth Incentive.
  • This is not counting the startup funding I can get for my business. I already have a small web app launched for my ERM community. 
In short, I think folks with legitimate business are the biggest free-riders of all. The government will incentivise Singaporeans to invent new jobs. 

For folks who can code in middle-age, incorporation is probably the best move a person can make given all this age discrimination we are facing. Given that I already have some revenue, I will probably incorporate, hire an assistant before even deciding what new business I will get into beyond investment training. 

What a great time to be alive in Singapore!


 

3 comments:

  1. Hahaha maybe that's why you see many SME's in singapore running losses or barely break even year after year, but the owners are all living in bungalows & driving Merz or Ferraris.

    A pte ltd is better than any structured vehicle a private banker can conjure up lol.

    In pro-biz pro-capitalist pro-finance pro-asset Singapore, one will have to be an idiot not to game the system & to freeload (there I said it!) as much as possible.

    In fact it's pretty rich for PAP to bring up free riding, seeing that a majority of MPs seemed to have free rided on the coattails of senior ministers into parliament. Of course they will argue where got free ride --- carrying balls is hard work you know!!!

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  2. Hi Chris,

    I am not sure whether incorporation suits you provided that you want to start a legacy in the business. If you prefer to be simple, it might be a better approach not to opt for incorpration.

    WTK

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