EY’s reactions to Singapore Budget 2017

Singapore, 20 February 2017

  • Share

EY today released its reactions to the Singapore Budget 2017 announcement.

Overall views

Mrs. Chung-Sim Siew Moon, Head of Tax Services, Ernst & Young Solutions LLP says:
“Budget 2017 is one of the most comprehensive Budgets ever delivered, touching every aspect of Singapore and its people.” 

Mrs. Chung-Sim Siew Moon, Head of Tax Services, Ernst & Young Solutions LLP says:
“The Finance Minister is preparing Singapore and her people for tax increases to come in the near future. The commitment by Singapore to uphold its principle of a broad-based, progressive and fair tax system is exhibited in a number of the measures proposed during Budget 2017.”

Mrs. Chung-Sim Siew Moon, Head of Tax Services, Ernst & Young Solutions LLP says:
“Budget 2017 builds on the themes of past Budgets – strengthening the capabilities of our enterprises and building a caring and inclusive society with the recommendations of the Committee on the Future Economy.”

Mr. Russell Aubrey, Partner, Tax Services, Ernst & Young Solutions LLP says:
“The Budget shows great attention to detail in many areas to help businesses innovate and internationalise and Singaporeans to enhance skills.”

Mr. Russell Aubrey, Partner, Tax Services, Ernst & Young Solutions LLP says:
“Collaboration for growth is a key feature of this Budget. Universities, government agencies, businesses, innovators, regulators and unions all working cooperatively for the good of Singapore.”

Mr. Russell Aubrey, Partner, Tax Services, Ernst & Young Solutions LLP says:
“This Budget breathes life into many of the CFE recommendations. We see funds set aside to drive an uptick in innovation and the development of digital capabilities in corporates and individuals – which are urgent tasks at hand because these take time to bear fruit and are important to long-term competitiveness.”

Ms. Tan Bin Eng, Partner, Business Incentives Advisory, Ernst & Young Solutions LLP says:
“The overall tone of the Budget is one of prudence and a continuation of the recent policies. While this is not unexpected, many who were hoping for bolder measures in the CFE and the Budget may be disappointed. The approaches remain highly targeted. Some may have preferred the Government to take a broader approach and a more enabling role towards creating an agile and adaptive economy.”

Mr. Chester Wee, Partner, International Tax Services, Ernst & Young Solutions LLP says:
“Singapore continues to adopt a prudent fiscal policy, while providing support to businesses facing cyclical headwinds in their transition. This fiscal discipline has allowed Singapore to maintain a competitive and pro-growth tax regime.”

Mr. Adrian Ball, Partner, EY Asia-Pacific Indirect Tax Leader, Ernst & Solutions LLP says:
“In a world where the mood is inward-looking in several of the most advanced economies, Singapore reaffirms its pro-globalization and international outlook, both economically and environmentally.”

Mr. Adrian Ball, Partner, EY Asia-Pacific Indirect Tax Leader, Ernst & Solutions LLP says:
“Aiming to achieve 2-3% quality GDP growth, Singapore is clearly investing in its people and businesses to take full advantage of the higher growth in overseas emerging markets.”

Mrs. Mildred Tan, Managing Director, Ernst & Young Advisory Pte. Ltd. says:
“Budget 2017 is a future-focused Budget, so as to prepare Singapore’s economy for a digital future. To that end, there were many interesting initiatives including the ‘International Partnership Fund’ and the ‘Global Innovation Alliance’. In addition, it continued with the themes of reskilling and continuous upgrading of our workforce with ‘Attach and Train’ and,‘SkillsFuture’, and the ‘Special Employment Credit’ scheme for older workers. As the economy transforms itself in the digital age, these initiatives will enable Singapore’s workforce to be adaptable to change, resilient to disruption, and competitive in the global marketplace.”

Measures to support business

Mr. Chester Wee, Partner, International Tax Services, Ernst & Young Solutions LLP says:
“The proposed near-term Budget measures are targeted especially at helping SMEs that are going through structural changes and cyclical downturn.”

Mr. Chester Wee, Partner, International Tax Services, Ernst & Young Solutions LLP says:
“People, funding and digital capabilities are key pillars for SMEs to achieve sustainable growth. The Government recognises their importance and has directed the 2017 Budget to tackle these issues.”

Mr. Chester Wee, Partner, International Tax Services, Ernst & Young Solutions LLP says:
“While there are various wage support schemes, these cost savings will be diluted by the increase in diesel and water tariffs and foreign worker levy, especially for companies in the construction, logistics and manufacturing industries.”

Ms. Amy Ang, Partner and Asean Financial Services Organisation Tax Leader, Financial Tax Services, Ernst & Young Solutions LLP says:
“In challenging times, it is reassuring that the Government has not made immediate changes to raise income tax and GST. At the same time, the stage is set for impending changes over the next few years, which are required to fund the various initiatives for Singapore’s next phase of growth.”

Mr. Chia Seng Chye, Partner, Tax Services, Ernst & Young Solutions LLP says:
“The enhancement of the corporate tax rebate with a S$25,000 cap for YA2017 is indeed welcomed news and the extension of the rebate to YA 2018 with a cap of S$10,000 is a bonus to businesses.”

Strengthening enterprises’ capabilities

Through scaling up globally

Ms. Tan Bin Eng, Partner, Business Incentives Advisory, Ernst & Young Solutions LLP says:
“The measures to deepen our partnerships internationally and enhance capabilities and international exposure will be widely appreciated. Given the diverse region Singapore is in and the growth opportunities ASEAN presents, fostering a close and deep understanding of the region is imperative. The extension of the global innovation alliance will allow Singaporeans to build an international mindset through greater international exposure from early on.”

Through digitalisation

Mr. Chia Seng Chye, Partner, Tax Services, Ernst & Young Solutions LLP says:
“The SME Go Digital Programme is a positive action response and recognition by the Government of the importance of our SMEs to embrace, adapt and grow digital capabilities now rather than later.”

Mr. Samir Bedi, Partner, People Advisory Services, Ernst & Young Solutions LLP says:
“The Budget sets clear direction of skills that could be core to the future workforce around digital, innovation and being globally connected. The Budget supports the heart of the local economy and employers of the majority of the local workforce – the SMEs – through the Go Digital Programme.”  

Mr. Chester Wee, Partner, International Tax Services, Ernst & Young Solutions LLP says:
“The Government recognises that SMEs need a step-by-step guide to go digital to innovate and compete effectively in today’s digital era. This targeted support is expected to be more impactful and to produce results.”

Mr. Yeo Kai Eng, Partner, GST Services and Asean Indirect Tax Leader, Ernst & Young Solutions LLP says:
“The introduction of the Go Digital Programme for SMEs is timely. The need for SMEs to embrace and develop their digital capabilities is inevitable or they face the risk of ‘extinction’.”

Through innovation

Ms. Tan Bin Eng, Partner, Business Incentives Advisory, Ernst & Young Solutions LLP says:
“The continued emphasis on the importance of innovation to the long-term growth of our economy will be welcomed by companies, especially with the impending expiry of the PIC. The targeted strategies to provide a stronger push for collaborations with research institutes and provide SMEs with access to IP can be a major boost for companies. The key will lie in strong implementation to identify and match such collaborations.”

Ms. Amy Ang, Partner and Asean Financial Services Organisation Tax Leader, Financial Tax Services, Ernst & Young Solutions LLP says:
“The blueprint for Singapore’s future economy has been released by the CFE and the proposed infrastructure is boosted by the introduction of the different funds. The key to success now lies with the effective connectivity with our SMEs to achieve the desired state of innovation.”

Deepening our people’s capabilities

Mr. Samir Bedi, Partner, People Advisory Services, Ernst & Young Solutions LLP says:
“The Budget supports the upskilling of our workforce through continued assistance to enable individuals – whether through encouraging employers or employees on their own – to acquire deeper skills and competencies in new areas such as digital, and help them apply these in new and existing jobs to stay competitive and relevant.” 

Mr. Samir Bedi, Partner, People Advisory Services, Ernst & Young Solutions LLP says:
“The inclusion of employers and TAC’s to receive funding support from SkillsFuture SG to develop training programmes will enable a win-win solution for both employer and employee. We expect to see a higher focus on learning and development of employees through their career.” 

Mr. Samir Bedi, Partner, People Advisory Services, Ernst & Young Solutions LLP says:
“From an individual perspective, the Budget inspires a collective spirit allowing each Singaporean to chase their dream and live the can-do spirit.”

Mr. Samir Bedi, Partner, People Advisory Services, Ernst & Young Solutions LLP says:
“On top of the Wage Credit Scheme and SME Working Capital Loan, SkillsFuture Leadership Development Initiative would give Singapore leaders greater confidence and be more prepared to tackle uncertainties, understand cross border complexities and to be more agile knowing that they have the necessary support.” 

Mr. Samir Bedi, Partner, People Advisory Services, Ernst & Young Solutions LLP says:
“While the extension of re-employment age from 65 to 67 helps retain skilled experienced workers within our workforce, we must continue to identify areas within the SkillsFuture initiative to enable the acquisition of new skills amongst elderly workers even as industries evolve over time.”

Capabilities and Partnerships: Industry Transformation Maps

Mr. Samir Bedi, Partner, People Advisory Services, Ernst & Young Solutions LLP says:
“The accelerated timeline of launching the remaining 17 ITMs will enable the acquisition of skills across sectors and thus enhancing the employability of people across sectors.” 

Mr. Samir Bedi, Partner, People Advisory Services, Ernst & Young Solutions LLP says:
“While the ITMs address the skills upgrading needed within each of the key sectors, we must continue to identify key skills that cut across multiple sectors, and seek to imbue these skills within our broader educational system.” 

Mr. Samir Bedi, Partner, People Advisory Services, Ernst & Young Solutions LLP says:
“To make training programmes more relevant to the emerging trends disrupting our economy, a multi-pronged effort involving Government agencies, educational institutions, TACs and unions must work closer together to shorten the timeline needed to develop and deliver training content addressing these disruptions in a timely manner. 

Mr. Samir Bedi, Partner, People Advisory Services, Ernst & Young Solutions LLP says:
“Apart from developing modularized and relevant training programmes for employees, greater support can be provided to business owners, especially SMEs, to encourage greater investment in the learning and development of their staff to utilise deeper skills.” 

Developing a vibrant and connected city

Carbon taxes

Ms. Angela Tan, Partner and Asean Business Tax Services Leader, Tax Services, Ernst & Young Solutions LLP says:
“Carbon tax schemes have been in force in certain geographies in Europe as early as 90’s and since early part of this decade the trend of companies setting internal carbon pricing mechanisms is increasing. Though the 2019 carbon tax is targeted on large direct emitters of greenhouse gases, i.e., chemicals and manufacturing, companies and domestic users would also be encouraged to invest in energy-efficient equipment and tap on investment allowance schemes to obtain enhanced capital allowances. A price for carbon imminent in larger countries like China, South Africa this year, today’s move reiterates Singapore’s commitment to combat global warming.”

Ms. Tan Bin Eng, Partner, Business Incentives Advisory, Ernst & Young Solutions LLP says:
“The possibility of carbon taxes and the increase in water costs may impact Singapore's global competitiveness in this current environment where cost containment is already a challenge. It will be important that countermeasures and incentives to defray these costs and encourage ways of reducing emissions and water usage be introduced.”

Mr. Chester Wee, Partner, International Tax Services, Ernst & Young Solutions LLP says:
“Carbon taxes will change the way energy will be produced and consumed. A more balanced use of carrots and sticks should encourage more early adopters of smart power, and green and low-carbon technology.”

Mr. Yeo Kai Eng, Partner, GST Services and Asean Indirect Tax Leader, Ernst & Young Solutions LLP says:
“Thumbs-up as we see the drive towards a cleaner and more environmental friendly Singapore with measures such as the introduction of carbon tax, revision to diesel taxes and the vehicular emissions scheme.”

Mr. Grahame Wright, Partner, People Advisory Services – Mobility, Ernst & Young Solutions LLP says:
“Singapore takes an active stand to fight climate change with a carbon tax confirmed for the future, and changes to diesel taxes and the CEVS to encourage more environmentally friendly vehicles on our roads.”

Building a caring and inclusive society

Mr. Grahame Wright, Partner, People Advisory Services – Mobility, Ernst & Young Solutions LLP says:
“Singapore continues its journey towards a more caring and inclusive society by addressing needs of people with disabilities, families and communities.”

Mr. Grahame Wright, Partner, People Advisory Services – Mobility, Ernst & Young Solutions LLP says:
“As more people with disabilities and mental health issues are integrated into employment, this will create double benefits of encouraging greater inclusion in our society while enabling this group to participate more actively in the economy.”

Mr. Grahame Wright, Partner, People Advisory Services – Mobility, Ernst & Young Solutions LLP says:
“Additional pre-school care places will be warmly welcomed by new parents seeking to ease the burden of returning to work after child-birth, but will this alone be enough to have a significant impact on our low birth rates?”

Mr. Grahame Wright, Partner, People Advisory Services – Mobility, Ernst & Young Solutions LLP says:
“The additional first-time housing grants for resale flats will help to shift focus from BTO to resale flats, increasing demand on existing housing stocks and possibly shoring up prices on these properties.”

Mr. Grahame Wright, Partner, People Advisory Services – Mobility, Ernst & Young Solutions LLP says:
“Singapore will continue to face challenges of an aging population in coming years, particularly with additional health care costs and problems of dementia in the community. This Budget continues to address these challenges head-on without shying away from the uncomfortable topics of mental health and disabilities.”

Ms. Kerrie Chang, Partner, People Advisory Services – Mobility (Tax), Ernst & Young Solutions LLP says:
“For workers who are older than 65 years on 1 July 2017 (when the re-employment age is raised from 65 to 67 years), it is heartening to know that support will be given to businesses to encourage them to continue to hire older workers. Apart from the existing Special Employment Credit, the Additional Special Employment Credit provides a win-win situation – it hopefully translates into continued employment for the older workers as well as helps companies to retain these workers, benefit from their experience and manage their business costs and cash flow.”

Mr. Yeo Kai Eng, Partner, GST Services and Asean Indirect Tax Leader, Ernst & Young Solutions LLP says:
“With more funding for sports announced in this Budget, hopefully we can achieve even greater success at the Olympics and other international sports events.”

Personal income tax

Ms. Kerrie Chang, Partner, People Advisory Services – Mobility (Tax), Ernst & Young Solutions LLP says:
“The absolute limit of the one-off individual income tax rebate of S$500 is lower compared to past years when a similar tax rebate was announced. Nonetheless, with the continuing challenges of a slowing economy and job security concerns, the announcement of a tax rebate is welcomed as it will lower the tax cost of all resident taxpayers.”

Other tax measures

Digital economy

Mr. Yeo Kai Eng, Partner, GST Services and Asean Indirect Tax Leader, Ernst & Young Solutions LLP says:
“As more countries take steps to tax the digital economy, it may be inevitable for Singapore to adopt similar measures – introducing some form of GST registration for overseas online suppliers and removing or reducing the exemption threshold for importation of low value items.  The Government will also have to evaluate whether it is time to activate the reverse charge mechanism.”

Mr. Yeo Kai Eng, Partner, GST Services and Asean Indirect Tax Leader, Ernst & Young Solutions LLP says:
“In deciding whether or not to impose GST on the digital economy, the Government will have to evaluate the amount of tax revenue to be collected, the need to level the playing field between Singapore suppliers and overseas online suppliers and the ease of implementing and administering any new GST rules.”

Mr. Chester Wee, Partner, International Tax Services, Ernst & Young Solutions LLP says:
“Countries around the world are beginning to adopt new tax laws or dramatically change the way they interpret existing laws and bilateral tax treaties for an increasingly digitized, globalized economy. The Minister has announced that Singapore is studying this area of taxation and companies should be given sufficient time to make tax-efficient transition.”

Goods and services tax

Mr. Yeo Kai Eng, Partner, GST Services and Asean Indirect Tax Leader, Ernst & Young Solutions LLP says:
“The Minister has given the heads-up in growing the revenue base. In the coming years, with the expected higher spending on health care and infrastructure, there is room for an increase in the GST rate from the current 7%, though this is likely to be after 2020.”

Base erosion and profit shifting (BEPS)

Mr. Jerome van Staden, International Director, International Tax Services, Ernst & Young Solutions LLP says:
“Budget 2017 emphasises the importance of the OECD BEPS programme. It confirms that the Government supports the principle that companies are taxed where substantive economic activities are performed and that it is, in consultation with businesses, refining the tax regimes and implementing the minimum standards.”

-ends-

About EY

EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.


EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.


This news release has been issued by Ernst & Young Solutions LLP, a member of the global EY organization.