Press release

18 Feb 2020 Singapore, SG

EY reactions to Singapore Budget 2020

Singapore, 18 February 2020 EY today released its reactions to the Singapore Budget 2020 announcement.

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EY today released its reactions to the Singapore Budget 2020 announcement. 

Overall views

Ms. Soh Pui Ming, Singapore Head of Tax, Ernst & Young Solutions LLP:

“Overall, Budget 2020 is a balanced one for extraordinary times. Budget 2020 showcased the government’s foresight in recognising that the twin drivers for Singapore economic transformation would be led by empowering the people of Singapore to learn and adapt, while incentivising enterprises to grow, transform and embrace our evolving workforce.”

Ms. Chai Sui Fun, Partner, International Tax and Transaction Services at Ernst & Young Solutions LLP:

“This Budget provides needed short-term help to businesses and households to ride the current economic difficulty without taking focus away from the need to build the country’s capacity and develop potential of Singaporeans to secure our future.”

Mr. Chester Wee, EY Asean International Corporate Tax Advisory Leader:

“While the Budget provides support packages to affected businesses and individuals during this trying time, it also urges continuous investments and upgrading so that Singapore emerges stronger after this challenging time.”

Mr. Chai Wai Fook, Partner, Tax Services at Ernst & Young Solutions LLP:

“Budget 2020 is a strategic road map that not just supports businesses and workers in this current fragile economic situation but also drives continued focus on transforming businesses and upskilling workers for the future.”

Mr. Chester Wee, EY Asean International Corporate Tax Advisory Leader:

“Singapore Budget 2020 introduces measures that cater to the specialised needs of the various industry sectors and companies in their respective stages of growth from micro enterprises to developed start-ups.”

Dealing with the immediate challenges

Stabilising and supporting our economy in the near term

Mr. Johanes Candra, Director, Business Incentives Advisory at EY Corporate Advisors Pte. Ltd.:

“With a single stroke, the Budget has addressed both the short-term operational concerns while doubling down the longer-term support for enterprises in adopting digitalisation, transforming core business functions and casting their sight at the overseas market.”

Ms. Kerrie Chang, Partner, People Advisory Services at Ernst & Young Solutions LLP:

“Businesses will welcome the generous Stabilisation and Support package as the government introduces a host of financial support schemes to help businesses stay afloat amidst the challenging times.”

Mr. Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP:

“A boost and relief for SMEs: support for enterprises on wage costs under Enhanced Wage Credit Scheme with enhanced salary cap from $4,000 to $5,000.”  

Mr. Chia Seng Chye, Partner, Tax Services at Ernst & Young Solutions LLP:

“The Budget has reiterated Singapore’s commitment to fight the economic slowdown and Covid-2019 by unveiling wide-ranging and far-reaching measures for Singaporeans and businesses, with targeted support for sectors and individuals that are more affected.”

Mr. Samir Bedi, EY Asean Workforce Advisory Leader:

“The Enhanced Wage Credit Scheme and Job Support Scheme should be well-received by employers and employees alike, which further motivates employers to recruit, reskill and retain locals, embrace technology to increase productivity and share gains with employees.”

Maintaining a sound fiscal footing to respond to uncertainties

Goods and Services Tax

Mr. Yeo Kai Eng, Partner, Indirect Tax Services, Ernst & Young Solutions LLP:

“Despite the anticipated GST rate hike, we will not see a GST rate hike, at least in 2021. Any deferral of the GST rate hike, even by one year, is always good news. We are however reminded that the GST rate hike is inevitable and cannot be put off indefinitely. A GST rate hike is therefore a certainty by 2025.” 

Ms. Kerrie Chang, Partner, People Advisory Services at Ernst & Young Solutions LLP:

“More than ample notice is given to Singaporeans of the delayed increase in GST rate. A promise is given to households that the government will absorb GST on matters that are close to our hearts, such as publicly subsidised health care and education, as well as an enhancement of the permanent GST Voucher scheme.”

Mr. Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP:

“GST rate to remain at 7% in 2021 provides certainty to businesses and eases their concerns around impact on consumption of goods and services.”

Others

Mr. Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP:

“A welcomed helping hand extended to businesses to tide over the immediate weak economic outlook through the 25% Corporate Income Tax Rebate capped at $15,000 per company.”

Mr. Chia Seng Chye, Partner, Tax Services at Ernst & Young Solutions LLP:

“The corporate tax rebate for corporations will provide added boost to businesses while the enhanced corporate tax breaks will enable businesses to reap benefits quicker for expenditures on fixed assets incurred this year.”

Mr. Russell Aubrey, Partner, Tax Services, Ernst & Young Solutions LLP:

“Sectors impacted by Covid-2019 are encouraged to use the ‘downtime’ to refurbish and retrain.”

Singapore as the Global-Asia node of technology, innovation and enterprise

Ms. Amy Ang, EY Asia-Pacific Financial Services Tax Leader:

“The enhancement of the Enterprise Financing Scheme’s Working Capital Loan and the new Temporary Bridging Loan Programme will enable companies to have easier access to working capital and hence better support companies to meet challenges and seize opportunities.”

Mr. Chia Seng Chye, Partner, Tax Services at Ernst & Young Solutions LLP:

“The temporary Bridging Loan Programme is a shot in the arm for our SMEs with expanded access to funding and cheaper borrowing with the government bearing a higher cost of funding. This will enable our enterprises to meet their immediate needs and create a stable platform for future growth and recovery.”

Mr. Chester Wee, EY Asean International Corporate Tax Advisory Leader:

“The enhanced working capital loan and temporary Bridging Loan Programme is a welcomed move to help alleviate the stress for our heartland enterprises and SMEs in meeting their daily operational cashflow needs in this challenging time.”

Enabling stronger partnerships

Mr. Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP:

“For business transformation to succeed, Singapore needs a supportive and enabling ecosystem. Trade associations and chambers (TACs) remain an important stakeholder and the greater support given to TACs to further deepen their capabilities will strengthen our business ecosystem.”

Mr. Benjamin Chiang, Singapore Government & Public Sector Leader and Partner, Advisory at Ernst & Young Advisory Services Pte. Ltd.

“The Singapore government continues to forge stronger partnerships with other countries through economic connectivity and digital connectivity. This will create appropriate ecosystems to help enterprises to expand and thrive in the global digital economy.”

Mr. Johanes Candra, Director, Business Incentives Advisory at EY Corporate Advisors Pte. Ltd.:

“Partnership between public and private sector – involving trade associations and chambers (TACs), government agencies, institutes of higher learning, banks and industry players – has emerged as a key enabler to accelerate the growth and transformation of our enterprises across the industry.”

Mr. Adrian Ball, Partner, Global Trade – Asean at Ernst & Young Solutions LLP:

“With 25 Economic and Free Trade Agreements (FTA), Singapore has invested in creating one of the most comprehensive FTA networks in the world. The benefits of FTAs have often been perceived to flow primarily to multinational corporations, i.e., to those companies who have the financial muscle and expertise to navigate complex FTA rules. Enhancing the Market Readiness Assistance grant for SMEs to help in accessing FTA benefits should drive exports and business growth.”

Mr. Adrian Ball, Partner, Global Trade – Asean at Ernst & Young Solutions LLP:

“With FTAs seen as an antidote to a world of trade disruption and increased protectionism, providing additional support to SMEs in utilising FTAs reaffirms Singapore’s place as a trading nation, intent on promoting global trade.”

Deepening enterprise capabilities

Mr. Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP:

“The new Enterprise Transform Package to groom business leaders of promising SMEs with training and mentorship will uplift the competency of our SMEs’ business leadership and sharpen their skillsets.”

Mr. Samir Bedi, EY Asean Workforce Advisory Leader:

“The Industry Digital Plans for the 23 industries’ transformation will help organisations deepen capabilities to innovate and remain relevant, and help people to define the digital skills required to achieve their fullest career potential.”

Mr. Samir Bedi, EY Asean Workforce Advisory Leader:

“The SkillsFuture Enterprise Credit ties in with the need for SMEs to transform, yet at the same time, makes it real by helping to transform jobs and keep workers relevant. This sends a message that no jobs will be lost in transformation as long as jobs are redesigned and employees have a lifelong learning mindset.”

Mr. Samir Bedi, EY Asean Workforce Advisory Leader:

“The support to firms in the investment of workforce capabilities is crucial in times of digitalisation. The Skillsfuture Enterprise Credit to defray 90% of out-of-pocket costs for job redesign will greatly assist and prepare firms in their workforce and enterprise transformation.”

Mr. Chia Seng Chye, Partner, Tax Services at Ernst & Young Solutions LLP:

“The expansion of the SME Go Digital scheme reaffirms that investments in technology and enhancement of digital connectivity is the way forward for Singapore. Further, the measures to support deep-tech startups is a welcomed move to create a ‘hubbing’ effect and platform whereby startups can thrive from funding support, industry network and expertise.” 

Mr. Chia Seng Chye, Partner, Tax Services at Ernst & Young Solutions LLP:

“SMEs have often highlighted that they do not fully understand the governmental schemes or measures that are available to them. The launch of the Go Business Platform should provide more direct and easier communication with the relevant bodies and allow enterprises to have better knowledge of and tap the help available to them.”  

Mr. Benjamin Chiang, Singapore Government & Public Sector Leader and Partner, Advisory at Ernst & Young Advisory Services Pte. Ltd.

“As part of our Smart Nation drive, and to help SMEs to innovate, grow and expand into new markets, Industry Digital Plans will be developed for more sectors to support SMEs in their digitalisation journey. SMEs often lack the resources available to multinational corporations, and the Industry Digital Plans provide a much-needed step-by-step guide on the digital solutions to adopt at each stage of their growth.” 

Developing our people for our future

Mr. Samir Bedi, EY Asean Workforce Advisory Leader:

“The top-up of the Skills Future credit with an expiry date will motivate Singaporeans to take action now on their own lifelong learning journey.”

Ms. Kerrie Chang, Partner, People Advisory Services at Ernst & Young Solutions LLP:

“Even though the Covid-2019 situation has dampened the economic outlook, it is important to prepare for recovery. Companies should seize the opportunity to upskill and reskill the workforce as this will put both business and individuals in a better position to be future-ready.”

Mr. Chester Wee, EY Asean International Corporate Tax Advisory Leader:

“Being in the heart of Asia, having a deep appreciation of the cultural sensitivities and political climates of the region has always been one of Singapore’s advantages. The Asia-Ready Exposure Programme and Global Ready Talent Programme will help Singaporeans get this exposure at a younger age and further entrench Singapore as the key facilitator in international business interactions.”

Ms. Kerrie Chang, Partner, People Advisory Services at Ernst & Young Solutions LLP:

“The enhancements to the CPF regime continue to focus on the accumulation of CPF savings during working years and the adequacy of retirement savings. We welcome the gesture to offset half the increase in employers’ CPF contribution.”

Foreign worker policy

Mr. Panneer Selvam, Partner, People Advisory Services at Ernst & Young Solutions LLP:

“The reduction of S-Pass quota for the construction, marine shipyard and process sectors in phases highlights the need for companies to review their employee mix and make the necessary adjustment.”

Sustaining Singapore’s success for our future generations

Mr. Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP:

“Diversity and inclusion play a key role in building a resilient and caring society in Singapore. The new Enabling Employment Credit aims to help persons with disabilities to find employment and is a step in the right direction.”

Building a sustainable Singapore, together

Mr. Chester Wee, EY Asean International Corporate Tax Advisory Leader:

“It is heartening to see sustainability having a place in our Budget. The strong fiscal position allows Singapore to set aside funds to deal with climate change and be a responsible global citizen.”

Mr. Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP:

“Singapore may be small but not short on innovative ideas and determination to achieve greater environmental sustainability. The use of incineration ash for road construction, and new tax incentives and structures for vehicles are important steps to address climate change.”

Securing our home

Mr. Benjamin Chiang, Singapore Government & Public Sector Leader and Partner, Advisory at Ernst & Young Advisory Services Pte. Ltd.

“Cybersecurity is a key pillar of Singapore’s Smart Nation strategy. It is paramount that we preserve trust in our digital economy by protecting personal data and our critical information infrastructure against cyberattacks. It is heartening to see that the government is investing S$1b over the next three years to bolster our cybersecurity capabilities against this evolving threat.” 

 

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Notes to Editors

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