Big Four release their wish-lists for Singapore Budget 2020: KPMG

This year’s Singapore budget is just around the corner, and the Big Four have released their wish-lists in advance. Consultancy.asia highlights one areas of each firm’s input in a four-part series. Here, KPMG shares a vision of Singapore as Asia’s Transformation Capital.

It has been impossible to escape the ominous backdrop in the lead-up to this year’s Singapore Budget – which is scheduled to be released on Tuesday – one of growing global economic instability. Yet, rather than just sounding out the familiar warnings alone, the Singapore member of global professional services firm KPMG has shared a bolder, longer-term vision for the city-state, suggesting Singapore should act now to become the Transformation Capital of Asia.

“Since its inception, Singapore’s success has been rooted in its ability to change,” KPMG states in a lofty introduction. “Transformation has not only been ingrained in us as a means of survival, it has become our way of life. We believe that transformation is now becoming a global industry, and therein lies a unique opportunity: for Singapore to lead transformation in our region. Budget 2020 can lay the groundwork for our nation to become the Transformation Capital of Asia.”

This status, says the firm, is “where everything that can be made faster, smarter or greener, will be made possible in Singapore.” Among other areas, KPMG calls for Singapore to transform itself into a sustainability hub while leading transformation in the digital economy, as well as for the transformation of Singaporean enterprises. “To lead in this era of disruption, we are recommending that Singapore embrace transformation as an entirely new, fast-growing industry.”

Headlining the proposals is a range of suggested tax and other incentives (including greater deductions for consultancy and training) around digital transformation and technological innovation, which the firm argues makes good economic sense, in that successful in-house solutions and the expertise gained can then be monetised as products or professional services available to other markets; see for example previous innovations in the Japanese motor industry.

Yet, one obvious threat to economies everywhere is climate change, along with developments around climate change such as shifting consumer expectations. While other regional governments drag their feet, one area where getting ahead of the curve could deliver a distinct advantage is in attracting top global talent – in turn creating a  broader and higher-quality tax base. To achieve this, Singapore will also need to be able to market the value of its initiatives.   

“We need to develop impact measurement frameworks that quantify the intangible value of our environmental and social initiatives,” states the firm, pointing to more green and open spaces, a sense of security, community-bonding platforms, and workforce up-skilling initiatives among examples. “This will allow us to put an appropriate price tag to these initiatives as part of decision-making, and help communicate more effectively the value of such initiatives to individuals.”

More concretely – to adopt a rather inappropriate term – KPMG forwards a raft of potential budgetary measures to enhance sustainability, from grants and incentives for innovation and the development of sustainability strategies to building allowances for modification projects and rental tax breaks on greener buildings. “Singapore is a concrete jungle, so there could be more ways in supporting developers and financiers to go green,” concludes KPMG Singapore’s deputy head of tax Ajay Kumar Sanganeria. “It is about putting in ways to fund sustainable initiatives.”

Next: Deloitte calls for tax credits to encourage skills development.