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SG Budget Reactions: SIATP says Budget seeks to ensure Singapore is future ready
BUDGET 2017 seeks to ensure that Singapore is future ready, addressing the needs of businesses, individuals and the environment, making it very well thought out and balanced, Gerard Ee, chairman of the Singapore Institute of Accredited Tax Professionals (SIATP) said on Tuesday.
A day after Singapore's finance minister, Heng Swee Keat, delivered his Budget 2017 statement, SIATP said it was pleased the minister addressed the global development of Base Erosion and Profit Shifting (BEPS) project, which seeks to clamp down on tax avoidance.
"It certainly reinforces what SIATP has been advocating - that the tax function is no longer a backbencher within the finance function. It is extremely important that businesses evaluate tax risks and tax implications as part of their strategic decision making processes and not as an afterthought," Mr Ee said.
He also noted that Budget 2017 brought some cheer with the income tax rebate for the individuals. Mr Heng announced a personal income tax (PIT) rebate of 20 per cent of tax payable, capped at S$500, will be given to Singapore residents for the year of assessment (YA) 2017.
"With a cap at S$500, the PIT rebate is targeted mainly at the lower and middle income groups. While it is lower than the S$1,000 rebate for YA2015, this rebate is certainly a welcomed surprise to many individual taxpayers especially in a year of much uncertainty."
Support for households to defray rising costs using schemes like the GST Voucher - U-Save Rebate scheme is also applauded.
"Remaining on the individual front, albeit on a per household basis, the government has continued with the GST Voucher Scheme as one of its crucial and very effective tools to address income inequality. The GST Voucher (U-Save Rebate) for eligible HDB households is increased and in addition, a one-off GST Voucher (Cash Special Payment) for the lower income households was announced. This will be especially welcomed for the lowest income households."
The enhancement of the corporate income tax is "welcome news for all companies, this is especially meaningful for small and micro enterprises".
Mr Heng said that the government will spend an extra S$310 million over YA2017 and YA2018 to enhance and extend the Corporate Income Tax rebate. Mr Heng said the cap for the rebate will go up from S$20,000 to S$25,000 for YA2017, and this rebate will remain at 50 per cent of tax payable. The rebate will also be extended for another year to YA2018 at a reduced rate of 20 per cent of tax payable, which will be capped at S$10,000.
The government is sending a very strong message to all residents in Singapore that it will continue to invest in public transport and infrastructure and support the green movement, SIATP said. It has introduced a carbon tax to reduce greenhouse gas emissions, restructured diesel taxes to a volume-based duty to encourage reduction in diesel consumption as well as adjusted two incentive schemes to encourage the use of cleaner vehicles.
"This is an excellent illustration of the important role of taxes in shaping economic activity and individual behaviour while maintaining a tax regime that is competitive and ensuring tax incentives are relevant,'' Mr Ee said.
Mr Ee said the introduction of a safe harbour rule for research and development (R&D) projects will help ease compliance burden for those involved in R&D cost sharing agreements (CSA).
"From February 21, 2017, such taxpayers will be allowed the option of claiming a tax deduction of 75 per cent of the payments made under a CSA for qualifying R&D projects. With this option, these taxpayers will not need to provide detailed breakdowns of the expenditures incurred under such CSA."