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Singapore Open To Further Cuts In Corporate Tax

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

15 March 2004

After cutting corporate tax to 20% in the recent budget, Singapore’s Deputy Prime Minister and Finance Minister Lee Hsien Loong said that he will not rule out cutting the tax further in future should the need arise.

“If it should become necessary to cut the corporate income tax again, we will have to do so. But it will mean we have to make up the revenue in some other way,” Lee commented whilst addressing parliament last week.

“While there are no plans to lower it further... neither is 20 per cent a sacred cow. Many countries are cutting their corporate income taxes. We have to continue to monitor our competitiveness,” he added.

However, Lee cautioned that tax cuts must not lead Singapore down the same road as Hong Kong, which is now battling against a significant budget deficit. Such a course would “undermine investor confidence, crowd out the private sector, dampen growth and weaken the Singapore dollar,” he argued.

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