Singapore Raises Tax Relief To Attract More Foreign Business Talent

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

04 March 2003

Finance minister Lee Hsien Loong is planning to raise the level of tax relief given to foreign businesses relocating employees to Singapore, continuing the city state's policy of attracting business talent from around the globe.

"The decision to re-locate is often easier if the individuals are able to bring their families with them", explained Loong, who is also deputy Prime Minister, as he justified the move.

The changes which came into effect at the end of last week extend previous legislation set out in the 1998 Double Tax Deduction for the Overseas Talent Recruitment Scheme. It now allows employers to claim up to SGD25,000 (previously SGD15,000) for so called P1 employment pass holders (a foreign employee earning over SGD7000 per month), and up to SGD15,000 (previously SGD 5,000) for P2 employment pass holders (foreign employees earning between SGD3,500 and SGD7,000 per month).

Press reports in response to the move claimed recruitment groups in the city-state to be enthusiastic about the move. David Ang, executive director of the Singapore Human Resources Institute reportedly said "If the employer has to pay a premium for foreign talent, a further tax deduction will help to compensate". Meanwhile, David Leong, managing partner at ManpowerCorp International cited examples around the world where encouraging ex-patriot workers had boosted the economy: "London and New York are good examples of vibrant cities with a large number of migrants and these talents strengthened many of their economic, social and artistic pillars".

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