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THE government will spend more than S$100 million over five years to spur mergers and acquisitions (M&A) in Singapore, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam on Monday.
He announced that the tax allowance for acquisition costs will increase to 25 per cent of the value of acquisition, up from the current 5 per cent. Companies will be able to claim M&A benefits for acquisitions resulting in at least 20 per cent shareholding in the target company, down from the current threshold of 50 per cent shareholding.
Mr Tharman also said he would extend the scope of International Enterprise (IE) Singapore's Internationalisation Finance Scheme (IFS) to support M&A that would help a company in its overseas expansion.
Under the IFS, the government takes on 70 per cent of the risk-share for approved loans. These are typically used for asset-based financing, structured loans, and bankers guarantees. The maximum loan quantum was doubled in last year's Budget from S$15 million to S$30 million.