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THE Singapore Institute of Accredited Tax Professionals (SIATP) on Monday applauds the Singapore Budget 2016 delivered in Parliament by Minister for Finance, Heng Swee Keat, on Thursday.
SIATP chairman Gerard Ee said it was admirable that Budget 2016 has rolled-out new measures, extended schemes that have been effective and rationalised initiatives that may not have achieved the original intentions.
"This is in symmetry to the tax professionals' body earlier call that as Singapore looks for fresh programmes and ideas to revitalise itself, it is also imperative to take rear-view mirror check on specific success factors already set in place for Singapore to be able to leap ahead towards SG100 in a prudent manner amidst a competitive global landscape," Mr Ee said.
SIATP highlighted five tax takeaways from Budget 2016. They are:
1) the lowering of taxes for the small-medium enterprises (SMEs);
2) the decision to allow the Productivity and Innovation Credit (PIC) scheme to lapse, and replacing it with more targeted and focused ones;
3) the introduction of the Business and Institutions of a Public Character (IPC) Partnership Scheme (BIPS) to incentivise employee volunteerism;
4) better financing support under the new Automation Support Package and,
5) the doubling of support in qualifying mergers and acquisition deals.
Mr Ee praised the BIPS as "it puts action to words and goes beyond donations''.
"This is the right move towards a society that cares for one another, across all ages and rungs of society. It is timely as a number of charities are currently faced with shortage of volunteers," he explained.
Under BIPS, businesses will enjoy 250 per cent tax deduction on wages and incidental expenses when they send their employees to volunteer and provide services to IPCs (including secondments). The tax deduction will be subject to the receiving IPC's agreement, with a yearly cap of S$250,000 per business and S$50,000 per IPC.
The government's decision to allow the PIC scheme to lapse shows that it is more targeted and focused on SMEs' automation and productivity, he added.
SMEs can also look forward to more support when they engage in M&As, thanks to the doubling of the existing cap for qualifying M&A deals made from April 1, 2016, to March 31, 2020. With this enhancement, tax allowance of 25 per cent and stamp duty relief will be granted for up to S$40 million of consideration (instead of the current S$20 million) paid for qualifying M&A deals per year of assessment.
These initiatives, Mr Ee said, will "contribute towards economic transformation of businesses and the nation as Singapore takes its initial steps towards SG100".
For more Budget stories, go to bt.sg/budget_16