SINGAPORE BUDGET 2024
FOREWORD
The Singapore Budget 2024 was delivered by the Deputy Prime Minister (DPM) and Minister for Finance, Mr. Lawrence Wong, on 16 February 2024.
The Budget represents a strategic financial plan designed to navigate the nation through current economic and geopolitical uncertainties while laying the groundwork for long-term resilience and prosperity.
Setting the course of the “Forward Singapore” roadmap, Mr. Lawrence Wong drove home the need to plan for longer-term threats including climate change and technological disruptions.
For Singapore to build its shared future in uncertain times, 3 interconnected strategies will need to be at the fore:
- Attracting high-quality and high-value investments;
- Differentiating through cutting edge innovations, and
- Amplifying Singapore’s role as a trusted regional leader.
Significant measures are also introduced to address the cost-of-living challenges for households through the Assurance Package, provide assistance for businesses to manage rising cost through the Enterprise Support Package, equip workers with better skillsets in order to adapt to technological advancements through life-long learning and career advancement, provide temporary financial support for the involuntarily unemployed, increase support for healthcare, and to enhance measures to boost retirement adequacy through the Silver Support Scheme. Collectively, these measures are aimed at ensuring that Singaporeans are well-equipped for future challenges.
Measures to support businesses in their sustainability journey will also be expanded to cover more business sectors, and grants will also be enhanced.
There is also a significant adjustment made to the tax regime. Singapore will implement the Income Inclusion Rule (IIR) and a Domestic Top-Up-Tax (DTT) component under Pillar Two of the Base Erosion and Profit Shifting (BEPS) 2.0 initiative, which will impose a minimum tax of 15% on in-scope entities from the financial year starting on or after 1 January 2025.
Other tax changes include the introduction of an additional concessionary tax rate tier of 10% for the Finance and Treasury Centre incentive and the Aircraft Leasing Scheme. An additional concessionary tax rate tier of 15% will also be introduced for the Development and Expansion Incentive, Intellectual Property Development Incentive and Global Trader Programme. Qualified shipping entities may apply for an alternative basis of tax where the qualifying income will be taxed by reference to net tonnage, aligning our shipping tax regime with international norms.
To enhance Singapore’s attractiveness for investments, Singapore will also introduce a Refundable Investment Credit (RIC), which will grant up to 50% support on each qualifying expenditure category. RIC is a tax credit with a refundable cash feature to encourage companies to make sizable investments that bring substantial economic activities to Singapore in key economic sectors and new growth areas. Singapore is likely to be the first country in the region to implement such a tax credit scheme aligned with the Organization for Economic Cooperation and Development’s Qualified Refundable Tax Credit (QRTC).
Overall, Budget 2024 reflects a strategic approach rolled out by the fourth-generation leadership as the first instalment of the “Forward Singapore” programmes. Themed “Building Our Shared Future Together”, it is well targeted to address current challenges and opportunities, with a focus on fostering economic resilience, enhancing social well-being, promoting sustainable development and maintaining social prudence. These key changes are aimed at positioning Singapore for continued growth and prosperity in a rapidly changing global landscape.
Ultimately, it will take a collective effort of all Singaporean to build a sustainable future in order to remain relevant. The plan forward is for Singapore to raise above the adversities of a new reality to build an economy that benefits many rather than a few.
However, with volatile times ahead, Singaporean have to stay agile and constantly calibrate its strategies with a strong focus on harnessing its competitive edge, innovation capabilities and regional leadership.
The future is in the hands of all Singaporeans. We have to chart the course and determine exactly what the “new era’ will be.
Jack Lam
Managing Partner
29 February 2024
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© 2024. This publication is contributed by Acutus Tax Services Pte. Ltd. All rights reserved.
Click here to view the Singapore Budget 2024 publication.