EY today released its reactions to the Singapore Budget 2023, themed “Moving forward in a new era”.
Ms. Soh Pui Ming, Singapore Head of Tax, Ernst & Young Solutions LLP says:
“Budget 2023 is a generous and inclusive Budget that focuses on helping families, lower-income group, as well as businesses, without losing focus on Singapore’s resilience and longer-term needs in an everchanging economic and geopolitical landscape.
“Enhancing Singapore’s social compact is clearly the centrepiece of this year’s Budget. The launch of Forward Singapore and the active participation of citizens highlights an interactive and collaborative process to chart out our nation’s future.
“The enhancements to existing innovative schemes will drive innovation and new capabilities as well as quality for our enterprises and workforce. This will help to safeguard our competitive position amid the new challenging environment.”
Supporting businesses
Mr. Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP says:
“Businesses are feeling the heat from mounting inflationary pressures that are expected to persist this year. The extended support given by the Government via the Energy Efficient Grants extensions can provide some relief to the higher energy prices faced by businesses in specific sectors.”
Mr. James Choo, Partner, International Tax and Transaction Services, Ernst & Young Solutions LLP says:
“The enhanced tax deductions under the new Enterprise Innovation Scheme will help to further encourage R&D activities and create a positive spin-off to the innovation ecosystem in Singapore.”
Mr. Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP says:
“Innovation continues to be an important way forward for Singapore to reposition its economy amidst the global challenges and tense geopolitical climate. The new Enterprise Innovation Scheme not only rewards large businesses that participate in innovation activities via enhanced deductions up to 400%, it also ensures that smaller businesses benefit from this scheme through the flexibility of a cash payout option.
Mr. Johanes Candra, Partner, Business Incentives Advisory, Ernst & Young Solutions LLP says:
“The introduction of the Enterprise Innovation Scheme and enhancements to the SME Co-Investment Fund and the Singapore Global Enterprises initiatives provide a holistic enabler to SMEs to achieve higher degree of success in their globalisation efforts.”
Ms. Amy Ang, EY Asia-Pacific Financial Services Tax Leader says:
“The government has supported the access to alternative financing such as private equity and venture capital funds through the Heliconia Capital. The continued recognition of the importance of such alternative financing is expected to contribute to Singapore’s growth as a leading asset management centre.”
Supporting workers
Mr. Johanes Candra, Partner, Business Incentives Advisory, Ernst & Young Solutions LLP says:
“The creation of Jobs-Skills Integrators will bridge talent gaps, addressing jobs and skillset needs of companies in Singapore.”
Mr. Panneer Selvam, EY People Advisory Services - Asean Integrated Mobile Talent Leader says:
“To ensure retirement adequacy, the announcement of the increase in the monthly salary ceiling for CPF contributions from S$6,000 to S$8,000 across 4 years is not surprising. A review is necessary and timely to enable workers to build a strong safety net, particularly with a view to address rising costs.”
Mr. Samir Bedi, EY Asean Workforce Advisory Leader says:
“The Budget charts a new way forward together for skilling and reskilling of employees by focusing across the ecosystem of learning.
“Taking training to quantifiable employment outcomes is the right move, with better jobs and wages to be piloted through the Jobs-Skills Integrators. This is an innovative approach to link skilling to outcomes thus further enhancing our lifelong learning culture. This will also ensure that businesses have access to workers with the right capabilities to support their business transformation.”
Mr. Simon Yeo, EY Asean Climate Change & Sustainability Services Leader says:
“Singapore has committed significant investments to catalyse research, innovation and enterprise in the sustainability front. We expect accelerating investments towards production and clean tech R&D to take place as part of Singapore’s green energy transition.”
A competitive, resilient and fair tax system
Mr. Chester Wee, EY Asean International Tax and Transaction Services Leader says:
“The global roll out of the 15% minimum tax is expected to be patchy in the initial start. Singapore has decided to implement BEPS 2.0 Pillar Two in 2025, when the rules are more stable and the full effect is felt. This early announcement gives certainty to businesses about Singapore's tax policy direction. Given that the European Union, South Korea and some countries are making the rules effective in 2024, large multinationals may still be impacted due to the interlocking nature of the rules. Hence, affected businesses should continue their efforts to get their people, systems and processes ready to comply with the new international tax compliance requirements.”
Mr. Desmond Teo, EY Asean Private Tax Leader says:
“Singapore continues to look towards asset-based taxation in pursuing a fair and progressive tax system, by introducing higher tiers of buyer stamp duty rates and higher ARF for higher-end luxury cars. The level of tax that taxpayers pay will be determined by their lifestyle choices.”
Mr. Desmond Teo, EY Asean Private Tax Leader says:
“As the number of single family offices based in Singapore grow, and a number of them are overseas families, allowing them to claim a deduction for overseas donations is a step towards encouraging them to pursue philanthropy and do more for society.”
Building a Singapore made for families
Ms. Kerrie Chang, Partner, People Advisory Services — Mobility Tax, Ernst & Young Solutions LLP says:
“The adjustment of the working mother child relief to a fixed dollar relief for children born after 1 January 2024 will benefit lower to middle-income female taxpayers as the quantum of the fixed relief for this group of taxpayers will be higher than what the current formula provides.”
Building a resilient nation
Ms. Toh Shu Hui, Partner, Tax Services, Ernst & Young Solutions LLP says:
“The spirit of corporate giving helps to build up the collective resilience of our society. The extension of the enhanced deduction on approved donations and the tax benefits accorded under the Corporate Volunteer Scheme recognise the value and efforts put in by businesses to contribute to Singapore’s social compact.”
Mr. Yeo Kai Eng, EY Asean Indirect Tax Leader says:
“Recognising the current period of higher inflation and the impact of the GST rate hike, the government’s provision of further support through the enhancements to the permanent GST voucher scheme and Assurance Package as well as the one-off support measures that will be given to many Singaporeans is welcomed. The enhancements will help to fully or substantially cover the increase in spending for the low and middle-income households.”
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