Here's why Singapore is one of the worst countries in reducing inequality

It was pulled down by its tax practices and its low score on public social spending.

Although it bested many world rankings, Singapore sank to the bottom 10 countries in terms of reducing inequality, according to a study by international confederation Oxfam International.

Ranking 149th out of 157 countries in the Commitment to Reducing Inequality (CRI) Index, Singapore’s score totaled 0.162. It also fell into the 22nd spot out of 23 countries in East Asia and the Pacific in reducing inequality.

“It has increased its personal income tax (PIT) by 2%, but the maximum rate remains very low at 22% for the highest earners,” the study said.

According to Oxfam, the weak finish by Singapore is partly due to the new indicator on harmful tax practices where it was ranked as the worst of all.

Apart from tax, its ranking was also dragged down by its relatively low score in public social spending as only 39% of its budget is allotted for education, health, and social protection. According to Oxfam, this is way behind South Korea and Thailand where 50% of their budget goes into public spending.

On labour, Oxfam noted that it has no equal pay or non-discrimination laws for women. They added that laws on both rape and sexual harassment are inadequate whilst there is no minimum wage, except for cleaners and security guards.

Denmark, Germany, and Finland managed to get the top three rankings. The US ranked 23rd, way behind Japan (11th) and Canada (18th).

Other countries in the bottom 10 are India, Bangladesh, and Laos, amongst others. Nigeria was ranked as the worst when it comes to reducing inequality.

Visit Singapore Business Review website for other stories.

Your rating: MagBe