EY reactions to recommendations by the Committee on the Future Economy

SINGAPORE, 10 FEBRUARY 2017

  • Share

EY today released its reactions to the recommendations by the Committee on the Future Economy (CFE) in Singapore.

Overall reactions

Mr. Max Loh, EY Asean and Singapore Managing Partner, Ernst & Young LLP says: “The CFE’s recommendations set out a viable blueprint to keep Singapore’s economy and people competitive in an environment defined by slowing global growth, rapid technological disruptions, and shifts in trade flows as a result of growing anti-globalization sentiment. The challenge lies in how successful we are in our tripartite collaboration – among workers, business and government – to execute the strategies; as well as how willing we are to accept setbacks, be nimble and adjust our tactics as the environment evolves. It is not a point-in-time panacea to the issues at hand but a commitment to a journey of realizing our big bets.”

“For the professional services sector, there is great potential for us to deepen capabilities and leverage digitalisation for innovation and productivity gains, as we seek to export our expertise and services leveraging Singapore’s position as a hub to the region. This requires a transformation of mindsets, skillsets and operations. While traditional qualities like technical excellence remain crucial, there will be a steep demand for holistic business advisors that deliver greater insights and value enabled by familiarity with technology, data and analytics as well as specialization in sectors.”

On strategy 2: Acquire and utilize deep skills

Mr. Samir Bedi, Partner, People Advisory Services, Ernst & Young Solutions LLP says: “As more Industry Transformation Maps are developed, while each industry is unique, there are common skills such as digitalisation, automation, analytics and customer service that are relevant across all sectors. Driving the acquisition of such deep skills will enhance the employability of people across sectors.”

“The acquisition and utilization of deep skills needs to be a continuous collaboration among employers, employees, training providers, educational institutions and the Singapore government. Employers need to identify the emerging trends affecting their sectors, and constantly grow and upskill their employees to navigate those changes. Concurrently, employees need to undertake continuous education and training to strengthen their employability as the economy transforms. Training providers and educational institutions must continue to provide relevant and up-to-date curricula, and government support measures and schemes will be crucial in obtaining buy-in from all parties.”

“Having buy-in from the SMEs, which are at the heart of the local economy and employers of the majority of our local workforce, will be critical to the success of the strategy of acquiring and utilizing deep skills. More targeted measures in the upcoming Budget to help SMES in this aspect will be welcomed.”

“With technology as the constant disruptor to most industries today, there will be jobs that will need to change to allow the inclusion of technology. Employees have to be multi-skilled to be able to use technology to do their job smarter, better and faster. For example, in the logistics sector, the role of the warehouse assistant is no longer the same. They must now learn to operate a more complex system of automated picking and packing, where it is to maintain, repair, troubleshoot and operate the system.”

Ms. Dilys Boey, EY Asean People Advisory Services Leader, Ernst & Young Solutions LLP says: “The CFE re-emphasizes the shift from the acquisition of skills to depth of skills and the practical applicability of skills in new and existing jobs. The challenge is to not regard technology as a disruptor but an enabler of innovation, value-add and productivity.”

On strategy 4: Build strong digital capabilities

Manik Bhandari, EY Asean Analytics Leader, Ernst & Young Solutions LLP says:

“We are currently seeing just a tip of the iceberg of the potential of data analytics and data science and its economic benefits for Singapore. There is great potential for Singapore to be an exporter of data and analytics products and services, given our proven credentials in exporting expertise in many arenas such as public infrastructure management. Singapore’s best bet would be to develop the intellectual property locally and license it in the international market, or deliver data-related managed services here for global consumption.”

“Our current Singapore brand and reputation in various sectors also confer competitive strengths. For example, in view of Singapore’s trusted reputation as a secure, transparent and compliant financial services hub, there is also an opportunity to develop a Singapore-branded set of analytical tools and capabilities targeted at anti-money laundering. The country’s position as a supply chain and logistics hub also opens up possibilities to be a leading advisor on digital supply chain as well as the operation and management of smart ports.”

“To fully tap the potential of data, Singapore will need to develop and attract the best analytics talent and companies onshore. The current local talent pool is constrained and so there needs to be an accelerated focus on developing our human capital to match the growth aspirations of the data industry. Training and educational institutions play a key role in ensuring a pipeline of analytics professionals. To attract world-class talent, Singapore should also seek to nurture a vibrant ecosystem that thrives on public-private partnerships, pro-innovation policies, IP and R&D best practices, and funding and mentorship is sustained.”

On recommendation 7.4: Review and reshape Singapore’s tax system

Overall

Mrs. Chung-Sim Siew Moon, Head of Tax Services, Ernst & Young Solutions LLP says:

“It will be interesting to see if Singapore is bold enough to simplify its tax system as it upholds its two principles of a broad-based, progressive and fair tax system; and be competitive and pro-growth. We hope the tax measures to be proposed in Budget 2017 will shed light on the government’s commitments.”

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

“The structural challenges of an ageing working population and slowing growth are not cyclical trends. These make it all the more important that our tax policies remain competitive and encourage growth. The call-out by the CFE to uphold the two principles of a broad-based, progressive and fair tax system and be pro-growth and competitive is a timely reminder to ensure that our tax regime stays relevant and agile to enable Singapore’s long-term economic success.”

International tax

Mr. Chester Wee, Partner, International Tax Services, Ernst & Young Solutions LLP says:

“Internationalization is one of the strategic focus of the Industry Transformation Maps. Singapore’s tax policies should support internationalization by minimizing uncertainty and double taxation.

Some areas to be enhanced include:

Continuing to broaden Singapore’s tax treaty networks, especially with countries in Latin America and Africa; minimizing permanent establishment risks by negotiating for longer period threshold in the tax treaties; proactively engaging Competent Authorities of treaty countries on withholding tax issues relating to service fees, Singapore status of a hub, etc; putting in place a tax framework for dual (local and overseas) employment arrangements; as well as considering patent box regimes in Singapore to encourage innovation and support exploitation of intellectual properties overseas.”

Goods & Services Tax (GST)

Mr. Yeo Kai Eng, Partner, GST Services and Asean Indirect Tax Leader, Ernst & Young Solutions LLP says:

“The current broad-based GST system in Singapore remains a progressive and fair tax system as it allows the taxation burden to be more evenly spread among the population. We currently have a relatively low GST rate of 7% in Singapore. However, with an ageing population and rising social expenditure, one should also expect an increase in the GST rate in the near future.”

“The key is finding the right balance in ensuring that the Singapore tax system remains competitive and pro-growth and at the same time addressing the tax challenges of the digital economy. From a GST perspective, our government will have to evaluate and decide whether to introduce simplified GST registration for overseas online suppliers and to make the reverse charge operative.”

-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 organisation, 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 organisation, please visit ey.com.

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