SINGAPORE BUDGET HIGHLIGHTS 2017
FOREWORD
The Finance Minister, Mr. Heng Swee Keat, presented his second Budget on 20 February 2017 against a backdrop on the recommendations by the Committee of Future Economy (“CFE”) and the clamour for assistance from the government to address rising business costs especially for Small and Medium Enterprises (“SMEs”).
As the outlook of the economy continues to remain gloomy, this year’s Budget adopts the usual prudent fiscal policy as Singapore repositions herself for the future. As expected, this Budget also took in the recommendations of the CFE to develop deep capabilities by going digital, embracing innovation and scaling up globally. This picks up from the theme from 2016 and will continue. The age of digitalisation has been gaining pace quickly and it is affecting both businesses and workers where they seek to embrace such structural change.
Different schemes have been introduced and different government agencies have been tasked with the administration of these schemes. Notably, the Internationalisation Finance Scheme, administered by the IE Singapore, has been enhanced and aims to help companies to take on more overseas projects.
To support economic restructuring, workers are encouraged to scale up by deepening their skillsets and gain working overseas experience. Several new initiatives have been introduced to assist workers to realise their new potentials. This will help them to stay ahead of the pack. As a cosmopolitan city, Singaporeans should not only excel in their field locally but should also gain overseas experience and build networks.
On the tax front other than tax rebate, it is disappointing to see that there are no measures proposed in the Budget that could assist the SMEs. The tax rebate announced that will reduce the tax payable amount to a certain extent for both companies and individuals is hardly sufficient and companies sustaining losses will not benefit from this initiative. As businesses look to ride out this economic slowdown and with certain industries such as the marine, oil & gas and construction facing cyclical weaknesses and challenges, it is disappointing that the Budget did not introduce more concrete measures to address these pertinent issues. Many of these companies out there are still grappling with the rising cost of business. Schemes such as the carry back of losses should have been enhanced by either increasing the quantum or the time period for relief to assist loss making companies.
Finally, as in all budgets, it is not possible for the Government to address all the issues in respect of its near term needs, but also to focus on preparing the nation to embrace the future. It is now up to businesses to innovate and strive to improve their capabilities in order to remain relevant.
Acutus is pleased to present you with this exclusive highlight to assist you in understanding the impact of the changes and initiatives that were unveiled in Budget 2017. As the details of these proposals are yet to be announced, our comments should not be considered definitive and readers are advised that they should not rely or use this as a basis for formulating business decisions.
We hope you will find this commentary useful and we look forward to supporting you in your business endeavours.
Jack Lam
Managing Partner
27 February 2017
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© 2017. This publication is contributed by Acutus Tax Services Pte. Ltd. All rights reserved.
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