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DELOITTE Singapore has called for the Singapore government to offer more support for innovative activities in view of the popular Production and Innovation Credit Scheme ending in 2017.
The accounting firm suggested that this could come in the form of enhanced tax deductions for spending incurred on such activities that lead to the creation of new products and services.
The government can also consider enhanced tax deductions to encourage digitisation, such as designing and implementing e-billing systems or workflow systems, to subsidise upfront costs, it added.
Existing policies can be enhanced to make it more attractive to invest in startups as well, said Deloitte. For example, investors whose startups turn a profit could have their divestment gains exempted from taxes.
Deloitte also offered suggestions to improve the resilience of Singapore's economy and build a strong Singapore core, such as allowing businesses to carry-back a higher amount of losses to profitable years, and enhanced tax deduction for costs incurred in hiring Singaporeans for key roles.
To ensure that Singapore keeps pace with international tax developments, the firm proposed that the government reviews whether Singapore's headline corporate tax rate of 17 per cent will remain competitive in the medium to long term.