Tax Cut Proposals Unveiled In Singapore

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

12 April 2002

A government panel in Singapore announced on Thursday that it has submitted proposals for far-reaching tax cuts, designed to increase the country's international competitiveness, to Deputy Prime Minister Lee Hsien Loong.

'Our strategy must be to create new economic activities, bring in new investments, and increase economic growth so as to create good, well paying jobs for Singaporeans,' Senior Minister of State for Trade and Industry and panel chairman, Tharman Shanmugaratnam explained.

The recommendations include plans for the reduction of the corporate tax rate from 24.5% to 20%, and the top personal rate from 26% to 20%. Analysts estimate that such a move would cost the government around $1.3 billion.

Other measures suggested by the panel in order to increase Singapore's attractiveness as a location for international business included a reduction of taxes on car ownership, the reduction or abolition of personal taxes on foreign income, and tax relief for companies on start-up costs, stock market listings, and takeovers.

Deputy Prime Minister Lee, who also serves as Finance Minister, said earlier this week that the government will now: 'study the proposals carefully and respond to them in a budget statement on 3 May 2002.' He also praised the panel's 'pro-growth, pro-jobs' approach.

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