Business Wants Tax Incentives In 2010 Singapore Budget

by Mary Swire, Tax-News.com, Hong Kong

20 January 2010

In a situation where Singapore’s government will probably maintain its expansionary stance in its 2010 budget, various tax proposals were discussed at a pre-budget meeting of business leaders organized by the Institute of Certified Public Accountants of Singapore.

Among the measures they thought would be helpful in boosting productivity as the economic recovery progresses were tax incentives for companies investing in technology and innovation, particularly small and medium-sized enterprises. In addition, while the jobs credit scheme was considered to have been a success in protecting employment, it was felt that incentives to train workers would also provide added productivity in industry.

There were also suggestions of assistance to the service sector, a growing part of Singapore’s economy. As an incentive, allowing the deduction of specific costs involved in a services business was discussed.

A capital gains tax in Singapore was mooted as a possibility, if only to counter speculation within the property sector. On the other hand, it was also pointed out that one of Singapore’s competitive strengths internationally was its lack of such a tax.

Some participants were concerned at the disparity, to Singapore’s disadvantage, between the rates of personal income tax in Hong Kong and Singapore, and between Singapore’s top marginal personal income tax rate at 20% and its 17% corporate tax rate in 2010, which could lead to some arbitrage.

The official Economics Strategies Committee is expected to release its budgetary recommendations later this month, while the government’s budget is normally produced in February.

Recommended