EY today released its reactions to the Singapore Budget 2021, themed “Emerging Stronger Together”.
Soh Pui Ming, Singapore Head of Tax, Ernst & Young Solutions LLP:
“A holistic and well-calibrated Budget that further propels us to emerge stronger together, where we move from containing the pandemic to restructuring and capturing growth opportunities; from delivering broad-based to more targeted support measures; and from protecting to creating new, better and more productive jobs.
Chai Sui Fun, Partner, International Tax and Transaction Services at Ernst & Young Solutions LLP:
“Besides job creation, the Budget also focuses on strengthening infrastructure, capabilities and international collaboration for Singapore, which will go a long way to deepen Singapore’s long-term competitiveness and relevance.”
Chester Wee, EY Asean International Corporate Tax Advisory Leader and Partner, International Tax and Transaction Services at Ernst & Young Solutions LLP:
“Together, we can achieve more. Budget 2021 underscores this by emphasising collaboration and partnership between large and small businesses locally, and between Singapore and other countries globally.”
Amy Ang, EY Asia-Pacific Financial Services Tax Leader:
“The extension of the Job Support Scheme and other recovery reliefs serves as a reminder that the pandemic is not over, the fight is still on and we cannot be complacent. Yet, with every crisis, we must look for opportunities. The focus is to ensure Singapore businesses and workers transform themselves and be exceptional.”
COVID-19 Resilience Package
Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP:
“Singapore Budget 2021 cushions the impact of COVID-19 pandemic for hard-hit sectors through the S$11b COVID-19 Resilience Package, while transforming our businesses and workforce to emerge stronger by setting aside S$24b to deepen business capabilities, redesign jobs and provide access to capital.”
Chia Seng Chye, Partner, Tax Services at Ernst & Young Solutions LLP:
“The COVID-19 Resilience Package sends a clear signal that the government will support businesses that are prepared to fight through tough times to keep jobs so that they can respond confidently upon recovery.”
Extension of Jobs Support Scheme (JSS)
Samir Bedi, EY Asean Workforce Advisory Leader:
“The extension of the JSS is an additional sweetener for hard-hit industries like aerospace, aviation and tourism. For companies in these sectors, now is the right time to achieve their optimum level of transformation, protect and redesign jobs, and in turn, benefit not only themselves but also uplift the entire ecosystem in Singapore.”
Chai Sui Fun, Partner, International Tax and Transaction Services at Ernst & Young Solutions LLP:
“The targeted extension of JSS for industries most severely affected by the pandemic offers an essential and welcomed lifeline that is crucial to sustaining Singapore’s capability in these sectors.”
Kerrie Chang, Partner, People Advisory Services at Ernst & Young Solutions LLP:
“The extension of JSS support will provide some relief to businesses in targeted sectors and help them to retain core staff and prepare for the gradual increase in demand. With targeted support, workers in these industries can focus less on job security concerns and more on personal development to better provide for their families.”
Samir Bedi, EY Asean Workforce Advisory Leader:
“The theme, Emerging Stronger Together, appropriately sets companies as the basic economic unit. Companies need to seek innovation and new opportunities, have access to financial capital and create new jobs that are modernised with technology. These jobs will ensure future employment and better wages built through a lifelong learning mindset.
Support for workers and individuals
Panneer Selvam, Partner, People Advisory Services at Ernst & Young Solutions LLP:
“The Jobs Growth Incentive has empowered employers to support differently enabled individuals, giving them fair employment opportunities and allowing them to be part of our caring and inclusive society. The extension of the scheme is welcomed and aligns with the country’s vision of emerging stronger together and leaving no one behind.”
Economic and workforce transformation
Vibrant business sector and ecosystem for innovation
Chester Wee, EY Asean International Corporate Tax Advisory Leader and Partner, International Tax and Transaction Services at Ernst & Young Solutions LLP:
“The Corporate Venture Launchpad promotes collaboration and encourages cross-learning between large businesses and start-ups. Large businesses can learn from start-ups on new and innovative ways to do business, while start-ups can benefit from the deep knowledge and expertise that are developed by large businesses over the years.”
Chia Seng Chye, Partner, Tax Services at Ernst & Young Solutions LLP:
“The investment into the new Corporate Venture Launchpad as well as the existing Open Innovation Platform and Global Innovation Alliance, reflects the accelerating shift to the digital economy and will help Singapore businesses to further sharpen their competitiveness in the global marketplace.”
Chester Wee, EY Asean International Corporate Tax Advisory Leader and Partner, International Tax and Transaction Services at Ernst & Young Solutions LLP:
“As Singapore companies tap into cross-border partnerships to develop new intellectual properties, they need to consider the appropriate structure for co-ownership and exploitation of such intellectual properties in order to safeguard against unexpected hefty overseas tax costs.”
Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP:
“Singapore Budget’s new digital initiatives provide a strong boost to businesses looking to kick-start or accelerate their transformation journey. It is timely for enterprises to seize the opportunity to tap emerging technologies and nurture digital talents.”
Co-funding transformation through a suite of capital tools
Chia Seng Chye, Partner, Tax Services at Ernst & Young Solutions LLP:
“The Digital Leaders Programme provides a shot in the arm for larger local enterprises to innovate and digitalise. Through hiring digital core team and developing digital transformation roadmap, businesses can better plan their digital journey and focus on the priority areas.”
Johanes Candra, Director, Business Incentives Advisory at EY Corporate Advisors Pte. Ltd.:
“The S$1 billion support for mature enterprises to invest in digital and emerging technologies will help Singapore business champions to lead, inspire and eventually bring along their respective industries and smaller companies to transform, scale and innovate.”
Chester Wee, EY Asean International Corporate Tax Advisory Leader and Partner, International Tax and Transaction Services at Ernst & Young Solutions LLP:
“In these challenging times, the local Enterprise Funding Platform provides the much-needed confidence boost to large local enterprises (LLEs) to continue to forge ahead with their growth expansion plans.”
Chester Wee, EY Asean International Corporate Tax Advisory Leader and Partner, International Tax and Transaction Services at Ernst & Young Solutions LLP:
“The proposed non-equity funding platform co-invested by the government and Temasek will provide LLEs an alternative avenue to raise funds without diluting existing shareholders’ control. Not all locally founded enterprises will however meet the local shareholding requirement if they had previously secured equity funding from foreign private equity funds.”
Transforming through skilled human capital and talent
Samir Bedi, EY Asean Workforce Advisory Leader:
“The increase of government co-funding ratio from 70% to 80% sends a clear message that job redesign is inevitable to help organisations drive transformation yet enable employees to optimise their work with technology. Redesigning jobs is here to stay and the government is committed to supporting this.”
Samir Bedi, EY Asean Workforce Advisory Leader:
“Lifelong learning and adapting are foundations of helping Singaporeans access the best employment opportunities and grow their careers. The extension of Wage Credit Scheme, Capability Transfer Program and enhanced SGUnited Jobs and Skills Package go a long way to achieving this.”
Chia Seng Chye, Partner, Tax Services at Ernst & Young Solutions LLP:
“A three-pronged approach is adopted by the government to achieve the complementarity of the local and foreign manpower in Singapore. The extension of the Wage Credit Scheme helps firms to retain or draw in locals while the extension of the Capability Transfer Program facilitates the transfer of deep skills from the foreign to local workforce. Coupled with the reduction in the S-Pass quota for foreign workers in the manufacturing sector, all these measures serve to moderate Singapore’s reliance on foreign manpower.”
Singapore Green Plan
Benjamin Chiang, EY Asean Government & Public Sector Leader:
“Singapore Green Plan 2030 is a bold whole-of-nation movement to create a sustainable, future-ready city. Climate change is a global challenge, and countries big and small – with their people – can and must do their part. Singaporeans can look forward to a greener environment that is harmonious with nature, and benefit from investments in research in sustainability and urban solutions. Further, initiatives such as the Agri-Food Cluster Transformation grant will help existing industries to develop new capabilities, pivot their business model to ride the growth in the “green” sector, and create new jobs.”
Adrian Ball, Partner, Global Trade – Asean at Ernst & Young Solutions LLP:
“Reducing Additional Registration Fee (ARF) on new electric vehicles (EVs) is supported by an increase in excise duties on fuel. Together with an enhanced investment in EV infrastructure, it is clear where the government is heading. Individuals will need to determine what these changes mean to them, but this pincer movement on costs and infrastructure should help accelerate the uptake of EVs in Singapore.”
Household Support Package
Panneer Selvam, Partner, People Advisory Services at Ernst & Young Solutions LLP:
“Extending the Business and IPC Partnership Scheme as well as the 250% tax deductions on donations made to Institutions of a Public Character (IPCs) until 2023 will encourage more charitable giving, volunteering and collaboration from individuals and corporates alike.”
Other tax policies
Adrian Ball, Partner, Global Trade – Asean at Ernst & Young Solutions LLP:
“With increasing levels of e-commerce, levelling the playing field to domestic retailers by charging GST on low-value shipments into Singapore was inevitable. The revenue that this measure generates is probably just icing on the cake compared to the core intent.”
Yeo Kai Eng, EY Asean Indirect Tax Leader:
“The GST rate increase is inevitable, and it is likely to come sooner, rather than later.”
Yeo Kai Eng, EY Asean Indirect Tax Leader:
“With the rise of online shopping, it is not unexpected that the government has now decided to extend GST to imported low-value goods. This not only levels the playing field between overseas and local suppliers but also provides another source of revenue for the government.”
Yeo Kai Eng, EY Asean Indirect Tax Leader:
“Currently, all goods (excluding intoxicating liquors and tobacco) imported by post or by air to a total value not exceeding S$400 (also known as low-value goods) are exempted from GST. With the announcement that GST will be implemented on low-value goods with effect from 2023, it is interesting to note that foreign vendors supplying low-value goods to non-GST registered customers in Singapore might have to register for GST in Singapore come 2023 if they meet the threshold for GST registration and impose GST on their supplies of low-value goods to non-GST registered customers in Singapore. For foreign vendors supplying low-value goods to GST registered customers in Singapore, the GST-registered customers would have to self-account for GST on the low value goods procured from foreign vendors.
Chester Wee, EY Asean International Corporate Tax Advisory Leader and Partner, International Tax and Transaction Services at Ernst & Young Solutions LLP:
“BEPS 2.0 proposals, if implemented, are expected to change significantly the way taxing rights are being allocated among jurisdictions. As an investment hub location, Singapore may see a drop in corporate tax revenue. The corporate tax system needs to be reviewed and adapted in response to international tax developments. It is welcomed that the government will adopt a consultative approach when considering changes to our corporate tax system.”
Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP:
“The extension of various temporary tax schemes introduced in last year’s Budget, such as the enhanced carry-back relief, provides a welcomed reprieve to businesses that are hard hit by the COVID-19 pandemic and helps to ease their cash flow concerns as they continue to weather the storm brought on by the pandemic.”
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