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Singapore Budget Reaction: Government has responded to challenges facing SMEs
For more stories, analysis and infographics on Singapore Budget 2015, head to btd.sg/budget_15
Here are some reactions to the various proposals announced in Singapore Budget 2015 to help small and medium-sized enterprises (SMEs):
Lee Tiong Heng, Tax Partner, Deloitte Singapore:
""Deloitte Singapore had wished for an extension of the M&A allowance scheme. Besides extending the scheme, the Minister has surprised us by increasing the M&A tax allowance to 25% from 5% and lowering the qualifying shareholding threshold to 20%. This will be of significant help for SMEs and businesses which are seeking for inorganic growth and consolidation."
Toh Boon Ngee, Tax Partner at KPMG in Singapore:
"Increasing the tax allowance from 5% to 25% and relaxing of the 50% shareholding requirement to 20% will allow more flexibility in restructuring and M&A for SMEs. This will enable SMEs to merge and grow, especially needed in the tougher global and regional business environment."
"Minister Tharman responded to calls from SMEs to provide support for internationalisation especially in areas of double tax deduction for salary costs. However the effectiveness of this initiative will be in the details."
Tay Hong Beng, Head of Tax at KPMG in Singapore:
"The enhanced M&A tax incentive has now made it even more compelling for businesses to come together and consolidate. This should inject a much needed interest and enthusiasm in the SMEs segment where consolidation would result in a much competitive business venture especially when venturing abroad."
Harvey Koenig, Tax Partner at KPMG in Singapore
"Encouraging innovation in SMEs through the Capability Development Grant is a top-down approach which could have limited reach. Instead, a broad-based market-driven incentive may be a better tool to encourage different forms of innovation.''
Alan Lau, Tax Partner at KPMG in Singapore:
"The government clearly recognises that one of the main stumbling blocks that hampers the development of local entrepreneurial spirit is the the challenging funding gap currently faced by many start-ups and SMEs. More importantly, under the new scheme, the government steps in to co-share the funding risk together with private sector financial institutions. Such co-sharing of risk is not only an innovative feature, but also lowers the commercial risk faced by banks involved in such early-stage funding business.''
Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP:
"The extension of the corporate tax rebate by another two years, albeit with a reduced cap of S$20,000 is welcomed for all companies, especially for cash-strapped SMEs which can reinvest the tax savings to upgrade their capabilities and drive innovation."
Chia Seng Chye, Partner, Tax Services, Ernst & Young Solutions LLP:
"The extension of the Wage Credit Scheme to 2017 will help SMEs to attract and retain their workforce - a key factor to grow and compete overseas."
Tan Bin Eng, Partner, Business Incentives Advisory, Ernst & Young Solutions LLP:
"The introduction of the new tax incentive scheme for companies targeted at internationalisation efforts will be greatly welcomed by many SME, which have been challenged to meet the requirements of current tax incentives that apply more generally to large companies."