Press release

18 Feb 2022 Singapore, SG

EY reactions to Singapore Budget 2022

EY today released its reactions to the Singapore Budget 2022.

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EY today released its reactions to the Singapore Budget 2022, themed “Charting our New Way Forward Together”.

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

“Singapore Budget 2022 exudes positivity for Singapore’s future, underscored by a ‘never-say-die’ spirit. It covers a myriad of areas, looking at near-term issues to charting the longer-term future for generations beyond. While we are not out of the woods from the pandemic, there is a clear need to move on to tackle the key issues ahead.”

Building a fairer and more resilient tax system

Corporate tax

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

“Following announcements by other countries, the Government's decision to introduce the Minimum Effective Tax Rate for Multinational Enterprises is aligned with the base erosion and profit shifting (BEPS) principles. The Government now has to design the tax laws to balance the collection of tax against the cost of compliance by taxpayers, in consultation with ecosystem players.”

Mr. James Choo, Partner, International Tax and Transaction Services, Ernst & Young Solutions LLP says:
“While the detailed rules for the implementation of the minimum tax rate of 15% are still being designed, it is now timely for companies to start examining and identifying gaps in internal systems and processes for data collection, to be ready for the new tax reporting obligations.”

Wealth tax and personal income tax

Mr. Desmond Teo, EY Asean Private Tax Leader says:

“Given the challenges in implementing a net wealth tax and the low prevalence of such taxation in OECD countries, the Government has taken pragmatic steps to encourage greater equality by focusing on traditional means of taxing wealth, namely increase in personal tax rates and tax on property as well as car ownership. Specifically, the focus is on higher-valued property and luxury cars, reflecting the intent in getting those who can contribute more to do so. The move reflects the Government's considered approach in raising tax revenue while maintaining Singapore's competitiveness as a wealth management hub.”

Ms. Kerrie Chang, Partner, People Advisory Services — Mobility Tax, Ernst & Young Solutions LLP says:

“The announcement of the personal income tax rate hikes targeted at the high-income earners is consistent with the push towards a progressive personal income tax regime. This rate change intentionally avoids any impact on low- and middle-income earners. Even with this increase, Singapore’s personal income tax regime remains competitive.”

Goods and services tax

Mr. Yeo Kai Eng, EY Asean Indirect Tax Leader says:

“Despite the need to raise revenue, the Government should be commended for recognizing the concerns of businesses and Singaporeans. This is reflected in the decision to manage the GST rate hike by firstly, not implementing the rate hike in 2022 and secondly, staggering the GST rate hike over two years instead of an immediate increase from 7% to 9%.”

Mr. Yeo Kai Eng, EY Asean Indirect Tax Leader says:

“The GST rate hike has been a concern for many Singaporeans. Therefore we can see the Government sparing no effort to reassure the people that the enhanced Assurance Package and the enhanced permanent GST voucher scheme would help to buffer the rate increase.”

Immediate support for households, businesses and workers

$500m Jobs and Business Support Package

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

“The $500m Jobs and Business Support package and extension of the Jobs Growth Incentive will be warmly lauded by eligible sectors that are more negatively impacted by the pandemic, by defraying wage costs and allowing them to invest in view of a rebounding economy.” 

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

“The extensive package of measures on R&D, digital technologies and financing support targeting SMEs will help to raise their capabilities and sharpen their competitiveness. This positions them well to seize opportunities and emerge stronger in the post-pandemic world.”

Investing in new capabilities

Strengthen our digital capabilities

Mr. Benjamin Chiang, EY Asean and Singapore Government & Public Sector Leader says:

“Singapore already ranks highly on many global smart city rankings. The continued investment in digital infrastructure, such as increasing broadband access speeds tenfold over the next few years and implementing 6G networks, will provide a future-ready platform for Singapore to retain its position as a top smart city. Coupled with the additional $200m set aside over the next few years to enhance schemes that build digital capabilities in businesses and workers, Singapore will be better able to participate in the digital economy and capture the new opportunities afforded by new and emerging technologies.”

Invest in our people

Mr. Samir Bedi, Partner, People Advisory Services, Ernst & Young Solutions LLP says:

“The accelerated pace of digital transformation underscores the importance of investing in new, related capabilities. It is heartening to see the extension of schemes for Productivity and SkillsFuture for Enterprises to support companies in building the necessary capabilities to achieve productivity and efficiency goals. Pursuing innovation and strengthening digital capabilities are important for businesses to be successful. The focus on digital skills in employees will ensure that they continue to be relevant and can contribute to the success of the business.”

Mr. Samir Bedi, Partner, People Advisory Services, Ernst & Young Solutions LLP says:
“In Singapore's ageing society, engaging our mature worker talent pool with their vast knowledge is critical. The SG United Mid-Career Pathways Programme to further train and prepare mature workers for transformation and career changes is essential in leveraging these talents, especially as we look to build capabilities in value-add roles that rely on knowledge-centric capabilities.”

Mr. Goh Jia Yong, Partner, People Advisory Services, Ernst & Young Solutions LLP says:

“Singapore's transition to a green economy must be accompanied with development of relevant skills. With an expected growth in demand of green jobs, green skills will accordingly need to be developed. We look forward to hearing more on specific initiatives to drive this development.”

Adjustments to foreign worker policies

Ms. Kerrie Chang, Partner, People Advisory Services — Mobility Tax, Ernst & Young Solutions LLP says:

“The government has long been focused on the promotion of fair employment practices, striking a balance between attracting top foreign talent and sourcing talent from the Singapore core. The increase in qualifying salary thresholds for Employment Pass and S Pass holders will ensure that the foreign talent brought in are highly skilled and valuable team members, who can positively contribute to the Singapore economy and the fabric of our society.”

Advance our green transition

Mr. Simon Yeo, EY Asean Climate Change and Sustainability Services Leader says:

“From 2024, businesses can use high quality, international carbon credits to offset up to 5% of their carbon emissions, in-lieu of paying carbon tax. This not only moderates the impact for companies, but also generates demand for carbon credits and positions Singapore to become a Carbon Services and Trading Hub for ASEAN and the wider Asia-Pacific region.”

Ms. Toh Shu Hui, Partner, Tax Services at Ernst & Young Solutions LLP says:

“Allowing the use of high-quality carbon credits to offset carbon taxes would further enable multi-national companies to leverage carbon credits generated from across the company to offset possible cost increments. The move could also have the effect of encouraging the growth of a sophisticated carbon trading market in Singapore, which could generate employment opportunities and value creation for Singapore.”

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

“Through the issuance of $35b green bonds, the Government is taking the lead to support businesses and sectors to move towards Singapore's net zero emissions goal. Singapore currently accounts for half of the ASEAN green bond and loan market. With the coming increase in carbon taxes in 2024, business will need to ensure that the necessary steps are taken to pivot towards low carbon and energy efficient solutions. This will increase the demand for funding for such solutions and should bring further growth in the green bond and loan market, cementing Singapore’s lead in the region.”

Renew and strengthen our social compact

Mr. Panneer Selvam, Partner, People Advisory Services — Mobility Tax, Ernst & Young Solutions LLP says:

“It is encouraging to see that this Budget focused on supporting not only vulnerable and low-income families, but also those with disabilities, charities and social service agencies. Financial support alone, however, is only one piece of the puzzle. Individuals and organizations must rally together to support the ecosystem to ensure sustainability in the long term.”


Notes to Editors

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