Land
\nIntensification Allowance for investments in construction and building costs
\nregardless of the industry or gross plot ratio as long as productivity
\nenhancement benchmarks are met<\/li>\n<\/ul>\n\u00a0<\/b><\/p>\n
3. Building supply chains for the future through resilience
\nand agility <\/b>(page 19 of proposal)<\/p>\n
Global supply chains are
\nstill reeling from the impact of shipment delays, container shortages and
\nconstrained production capacity. Meanwhile, rising costs for raw material,
\nshipment, labour and fuel have placed increasing pressure on companies. As a
\nkey port in the Asia Pacific, Singapore will have to take the lead in the global
\nrecovery. Demand worldwide is likely to fluctuate as the virus situation
\nevolves, and Singapore will have to be armed with strategies to protect and
\ndiversify its supply chains. <\/p>\n
\u00a0<\/p>\n
a) Setting
\nup Cognitive Decision Centres for supply chain visibility <\/i><\/b><\/p>\n
Investing in Cognitive
\nDecision Centre that tap predictive toolsets will allow Singapore to boost its
\nvisibility of supply chain, identify potential shortfalls and react quickly. To
\nincentivise global and regional companies to set up such centres here, we
\npropose extending grants for feasibility studies to be conducted and SkillsFuture
\ngrant support to help them build their capabilities at the centres.<\/p>\n
\u00a0<\/i><\/b><\/p>\n
b) Accelerating digital transformation for
\nsectors hit by global disruptions<\/i><\/b><\/p>\n
More support through tax incentives and dedicated programmes to nudge
\ncompanies towards accelerating supply chain digital transformation will also be
\nneeded, alongside the need to recruit talent that can drive technological
\nchange. Micro and small enterprises will benefit from having shared digital
\nplatforms to boost their productivity. Meanwhile, a higher percentage of financial
\nsupport, such as enhanced tax deductions, can be offered to companies that wish
\nto acquire new Enterprise Resource Planning (ERP) systems as part of their
\ntransformation. The manufacturing sector, in particular, will be looking for
\nthe extra boost as they are among the industries most exposed to global supply
\nchain disruptions. A higher percentage of financial grant support and enhanced
\ndeduction can be considered for companies most affected by the pandemic. <\/p>\n
\u00a0<\/p>\n
c) Grants and loans for companies to tap just-in-case principles in
\nimproving supply chain agility<\/i><\/b><\/p>\n
Historically, supply chains have relied on minimal inventory and lowest
\nmaterial cost with the use of “just-in-time” methodology. But increasingly,
\nadopting a “just-in-case” agile methodology will be crucial to build
\nflexibility and resilience. This will require companies to increase their
\ninventory levels and source materials from more expensive locations, which
\nmeans a need for more working capital. To improve ease of access to credit and
\nrelieve the cost pressures on businesses, we are calling for the government to
\noffer these companies financial grants and working capital loans.<\/p>\n
\u00a0<\/p>\n
4. Setting a course of recovery for trade, travel and
\ntourism <\/b>(page 24 of proposal)<\/p>\n
Singapore is well-poised to recover from the
\nCOVID-induced setback to hard-hit sectors such as travel, trade and tourism.
\nHowever, the acceleration towards digital adoption and seismic shifts in
\nconsumer behaviour amid the pandemic have left some businesses in the retail
\nand consumer sectors behind. Many find that they are unable to deliver
\nomni-channel success, as significant investments in infrastructure are needed. <\/p>\n
\u00a0<\/p>\n
a) Tax incentives to spur business recovery
\nin hard-hit sectors; extending property tax rebate and rental support packages<\/i><\/b><\/p>\n
As Singapore makes progress on its economic
\nrecovery, the government can consider measures to help businesses with expenses
\nfor international market expansion and investment development activities, such
\nas through enhancing the Double Tax Deduction Scheme for Internationalisation
\n(DTDi). The DTDi could be expanded to include (i) additional categories of
\nexpenses, such as COVID-19 travel related costs and (ii) enhanced 400 per cent
\ndeduction on existing qualifying expenses for businesses in trade, travel and
\ntourism sectors. Currently, the scheme offers a 200 per cent tax deduction on
\neligible expenses. In addition, extending property tax rebate and rental
\nsupport packages will help to alleviate the cash flow concerns for badly hit
\nbusinesses.<\/p>\n
\u00a0<\/i><\/b><\/p>\n
b) Enhance capital allowance and tax deduction
\nclaims for digitalisation initiatives<\/i><\/b><\/p>\n
To encourage businesses to step up
\ndigitalisation efforts and expand their service offerings, the government can
\nalleviate their cash tax burden by enhancing the capital allowance and tax
\ndeduction claims on such initiatives. Enabling the use of digital ecosystems
\nwill foster resilience and set businesses on the right path to recovery. The
\nSingapore Tourism Board could also set up a one-stop shop online marketplace
\nfor tourism and hospitality players to sell travel packages to tourists. This
\nnot only helps tourists book packages easily but also helps local businesses
\nget more publicity and visibility.<\/p>\n
5. Fuelling enterprise expansion and attracting unicorns
\n<\/b>(page 27 of proposal)<\/p>\n
In the immediate term, cash
\nflow will remain a focus for businesses amid increasing costs on all fronts and
\nmanpower limitations. These factors are expected to impact businesses and their
\nongoing transformation efforts to become more productive and sustainable. Despite
\nthis, many are eager to capitalise on M&A and organic growth strategies to seize
\nnew opportunities. It will be key to provide more targeted financial support,
\nwith a more gradual phasing out of these measures when the economy picks up. The
\nrecent introduction of the Singapore Exchange’s SPACs listing framework is a
\npositive step towards attracting fast-growing companies here. Singapore will
\nneed to continue to support unicorns to thrive, as this will not only add vibrance
\nto the entrepreneurial ecosystem but also bring benefits to the economy.<\/p>\n
\u00a0<\/p>\n
a) Financial support
\nmeasures to relieve immediate cash flow issues for businesses<\/i><\/b><\/p>\n
Financial support from the government in the
\nform of rent relief, cash grants, wage support and temporary bridging loans
\ncontinue to be effective measures to relieve cash flow issues. Some measures
\nthat could help alleviate tax outlays are an extension of corporate tax rebates
\nwith special rules allowing carry forward of unutilised credits to future years.
\nThe government could also explore allowing tax deferral on
\napplication by companies whose cashflow are adversely affected by the pandemic.
\nFor example, the payment of corporate income tax may be deferred by six to 12
\nmonths, coupled with longer instalment plans.<\/p>\n
\u00a0<\/p>\n
Other measures include allowing a deferral of distribution of taxable
\nincome by S-REITs and the carry back of tax losses to pre-COVID-19 periods.
\nAccelerating capital allowance claims for the next two years of assessment will
\nallow companies to minimise their tax liabilities during this difficult period.<\/p>\n
\u00a0<\/b><\/p>\n
b) Enhance M&A support schemes to help local enterprises grow and
\nexpand<\/i><\/b><\/p>\n
In the wake of the pandemic, government agencies can play a more active
\nrole to facilitate discussions on M&A and enable deals to take place. This
\nincludes providing support for M&A activities in targeted sectors.
\nFacilitating successful M&As would enable companies to gain bigger
\nfinancial strength and capabilities to succeed locally and regionally. We are
\nproposing to enhance grants for M&A deal evaluation costs, including
\nfinancial, tax, legal and commercial due diligence fees as well as those for post-deal
\nintegration costs. Tax deductions on abortive deal costs and other related
\ncosts should also be considered. Other measures that could spur enterprises towards
\nexpansion include allowing group relief and carry back of M&A allowances, bringing
\nback stamp duty reliefs on qualifying M&A transactions and enhancing fund
\nincentives schemes to facilitate capital investments.<\/p>\n
\u00a0<\/p>\n
c) Make Singapore the place for unicorns to
\ninvest and set up their base through targeted grants and tax incentives<\/i><\/b><\/p>\n
Currently, fast-growing companies in some of the
\n“hot sectors” may find that they do not necessarily fall within various
\ngovernment programmes, incentives and schemes. Many thus face challenges in
\ngetting the support they need. We recommend creating a closer public and
\nprivate collaboration to bridge this gap and extending these schemes to
\nnon-Singapore companies if they contribute sufficiently to Singapore’s GDP.
\nDoing so will help to create employment and upskill the Singapore workforce.<\/p>\n
\u00a0<\/p>\n
The government can encourage investments in
\npotential unicorns through more targeted grants and consider providing tax
\ndeductions or tax rebates for private enterprises with failed investments in
\nthese unicorns. These will support the entrepreneurial scene and entice both
\nlocal and overseas entrepreneurs. <\/p>\n
\u00a0<\/p>\n
6. Singapore’s rise as a wealth and asset management
\nhub <\/b>(page 31 of proposal)<\/p>\n
COVID-19 has fuelled the
\nrise of digital ecosystems, including highly integrated apps that offer a
\none-stop-shop for a range of financial services. Financial institutions will continue to
\nsee high returns especially in wealth management and personal banking, as
\ndigital innovation breaks down the barriers for services most often traditionally
\nreserved for high-net-worth individuals. At the same time, wealth managers are
\nbenefitting from higher transaction revenues as customers look to protect their
\nfinancial investments amid COVID-19 uncertainties. <\/p>\n
\u00a0<\/p>\n
On the asset management and fund
\ndomiciliation front, Singapore will have to continue to find ways to convince
\ninvestors and fund sponsors to shift over from established locations. One way
\nit can do so is through incentives to encourage the adoption of Singapore fund
\nvehicles other than the variable capital company (VCC). <\/p>\n
\u00a0<\/i><\/b><\/p>\n
a) Driving
\ngrowth for challenger banks <\/i><\/b><\/b><\/p>\n
Challenger banks,
\nwhich describe new banking players that have emerged since the Global Financial
\nCrisis, play a crucial role in the democratisation of wealth management for
\nmass market. With the entrance of digital banks and continued support for
\ndigital innovation, challenger banks will continue to shape the offering of
\nwealth management services. Wealth managers will look to partner these new
\nentrants to improve their overall client experience. Hence the government may
\nneed to step in to regulate by building structures to ease collaboration
\nbetween challenger banks and wealth managers, while reviewing competition rules
\nto keep players motivated. Introducing government controls and regulations
\nwould assist in increasing investor confidence and allow smaller providers to
\ngain some market share from traditional wealth managers.<\/p>\n
\u00a0<\/p>\n
b) <\/i><\/b>Positioning Singapore as the
\nchoice location for domiciling funds<\/i><\/b><\/p>\n
Singapore is
\nalready an established asset management hub. However, for Singapore to also
\nbecome the default go-to location for global funds to be set up here, it will
\nbe important to find ways to convince investors and fund sponsors to shift over
\nfrom established locations. One of the biggest issues is investor familiarity.
\nThe recent promotion of Singapore as a funds domicile has almost exclusively centred
\naround the launch of the VCC. While the continued process of promotion is
\ncertainly a good thing, it is arguable that this could be expanded to include
\nincentives to encourage the adoption of Singapore fund vehicles other than the
\nVCC. This includes the limited partnership which has a largely untapped
\npotential as a master pooling vehicle for Singapore. Some funding could be made
\nto advisors based in Singapore to help with the promotion of the full suite of
\nSingapore fund vehicles internationally.<\/p>\n
\u00a0<\/p>\n
The continued
\npromotion of the VCC has increased the profile of Singapore as a place to
\nestablish a fund. However, there is room to help both fund sponsors and
\ncornerstone investors defray the costs of exploring the use of Singapore
\nstructures more generally. Currently, a fund is able to recover a significant
\nproportion of its establishment costs, but an investor who may incur additional
\nlegal expenses to understand exactly what the VCC is and how it works has to
\nbear those costs himself. Tweaks to the existing grant scheme to include
\nforeign tax and legal costs incurred by a cornerstone investor will be
\nbeneficial. The scheme could also be expanded beyond the VCC to pique interest
\nin new fund vehicle and could be used to encourage the adoption of the
\nSingapore limited partnership and even unit trusts and companies as well. <\/p>\n
\u00a0<\/p>\n
While Singapore
\nhas had a limited partnerships law since 2009, the government should explore a
\nmore nuanced and flexible limited partnerships law that addresses concerns that
\na foreign investor may have going into these structures. These include the tax
\nposition around a transfer of partnership interests and the relationship
\nbetween partners in questions of conflicts of interest and fiduciary
\nobligations.<\/p>\n
7. Driving technology innovation in a future shaped by
\n5G <\/b>(page 38 of proposal)<\/p>\n
\u00a0<\/p>\n
Singapore is poised to
\nroll out 5G by 2025 and there is significant market opportunity to ramp up 5G
\ninnovations with the help of both local firms as well as foreign direct
\ninvestments, along with infocomm talent across industries. These efforts should
\nbe undergirded by a reliable and progressive network infrastructure. <\/p>\n
\u00a0<\/p>\n
a)
\nBoosting network reliability by reducing mobile taxation and encouraging
\nnetwork sharing between service providers<\/i><\/b><\/p>\n
Having reliable network
\ninfrastructure is a critical need in any country that goes digital. One way
\nnetwork issues can be mitigated is via network sharing between 5G service
\nproviders as this expands the capacity of networks while avoiding the high
\ncosts of doing so, which would ultimately translate to better coverage and
\nreduced costs for users. Similar to other parts of the world, the government
\ncan incentivise network sharing by promoting common or shared infrastructure
\nand incentivising applications and software development, especially in the
\ninitial stages of deployment. Singapore could benefit from regulatory
\nguidelines that would encourage the adoption of this approach among telcos,
\nwhile balancing possible concerns over competition.<\/p>\n
\u00a0<\/p>\n
Mobile taxation can also
\nbe reduced for service providers, since industry trends show that good
\ninfrastructure availability tends to be lower in markets where operators have
\nto make higher tax payments. Therefore, as payments for spectrum rights and
\nlicences are not deductible for corporate tax purposes in Singapore, KPMG hence
\nproposes providing tax depreciation or writing down allowances for spectrum
\nrights payments, which will mirror the tax treatment in other countries.
\nWithout claimable tax deductions on such payments, there will be significant
\nadditional costs for telcos which may also be passed on to consumers. A stable
\ntax regime supporting investments can help a country’s mobile infrastructure to
\ndevelop at a faster rate while encouraging investments.<\/p>\n
\u00a0<\/p>\n
b)
\nBuilding the business case for 5G innovations and encouraging more developments
\nfor global competitiveness<\/i><\/b><\/b><\/p>\n
To enhance monetisation
\nand scalability around the 5G use cases generated within key sectors, KPMG
\nproposes the setup of a ‘digital community centre’ which facilitates sharing of
\nbest practices and ideas, while measuring outcomes and targets of use cases to
\nstrengthen the business case. The government could also explore the potential
\nof open-source technology applications in driving speed to market and reducing
\ncosts.<\/p>\n
\u00a0<\/p>\n
To encourage 5G
\ninnovation development and adoption, the government’s 5G innovation grant
\nadministered by the Infocomm Media Development Authority can be extended to new
\nsectors such as healthcare, fintech and agri-tech, while being expanded to
\ninclude subsidies for talent development and skills training. Refundable
\nR&D tax credits can be introduced to enhance the effectiveness of the
\ncurrent R&D tax incentive for smaller technology players that have yet to
\ngenerate profits. Offering refundable tax credits of up to 42.5 per cent of
\nqualifying R&D and innovation costs can help support these smaller
\nenterprises which are known for being nimble and with fresh ideas.<\/p>\n
\u00a0<\/p>\n
Greater collaboration
\ncan be fostered in industry ecosystems with government support taking the form
\nof grants to set up collaborative teams or partnerships between businesses in
\nthe technology, media and entertainment, and telecommunications sector. This could
\ninclude offsetting costs for engaging consultancy firms to provide their
\nexpertise. While there could be difficulties in getting competitors to share
\ntheir data, the government can explore how consumers can play a greater role in
\nfacilitating information sharing, along with the balancing of data protection,
\ntransparency and security priorities, and an increased focus on ethics in AI. <\/p>\n
\u00a0<\/p>\n
A copy of the Singapore
\nBudget 2022 proposal ‘Is an economic sunrise on the horizon?<\/i>‘ is
\nenclosed.<\/p>\n<\/p><\/div>\n\n
Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"S$1b Green Energy Investment Fund, Green Financing Bank and laws against greenwashing among proposals for Singapore to be key ESG hub Also proposed are measures to boost Singapore’s competitiveness ahead of new global tax rules Other recommendations include supporting businesses post COVID-19, building supply chain agility and driving the nation’s 5G roll-out These proposals are …<\/p>\n","protected":false},"author":1,"featured_media":20063,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[60],"tags":[],"_links":{"self":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/posts\/20062"}],"collection":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/comments?post=20062"}],"version-history":[{"count":0,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/posts\/20062\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/media\/20063"}],"wp:attachment":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/media?parent=20062"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/categories?post=20062"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/tags?post=20062"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}