SingTel Asks For Group Taxation Reforms

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

28 February 2002

Singapore Telecommunications Ltd, Southeast Asia's largest phone company has asked the Government to implement tax reforms in order to allow companies in Singapore to balance losses in new companies with profits in others.

The telecommunications company filed its consolidated tax proposal with both the the phone regulator and the country's tax authorities, arguing that current rules on group taxation hinder companies' efforts to expand.

'The change in taxation rules would be welcomed by the industry and help us to decide if it's worthwhile to take risks on some of the uncertain ventures we want to go into,' explained SingTel CEO, Lee Hsien Yang. The company, which is Singapore's largest publicly traded business by market value, has recently launched several new ventures, including a $2 billion C2C undersea cable which links several Asian markets.

Analysts have predicted that SingTel is likely to incur a loss on the C2C project this year. However, if the Government reacts to the company's calls for tax reform and introduces a consolidated tax regime for groups of companies, SingTel's bottom line prospects could be much improved.

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