Deloitte responds to 'extraordinary' Singapore Budget 2020

The Singapore Budget 2020 has arrived, and following Deloitte’s wish-list in the lead up – including a call for tax credits to encourage skills development – many of the firm’s senior leadership in Singapore and Southeast Asia have responded. Below is a selection of quotes:

LOW Hwee Chua, Regional Managing Partner for Tax & Legal at Deloitte Singapore and Southeast Asia:

"This is indeed an extraordinary Budget in extraordinary times."

"This may be one of the most far-reaching budget speeches yet; it was certainly one of the longest! A combination of near-term measures to address cost-of-living and economic challenges, combined with the ongoing restructuring and transformation measures, means that this budget addresses both the challenges of today and tomorrow."

"As expected, welcome boosts for tourism, aviation, retail and other COVID-19 affected sectors. Time will tell though if it is enough – especially if the expected downturn across Asia materializes and lasts."

"Lots of measures here to support Singaporeans: we saw lots of rebates, cash payouts and incentives; and actions around job opportunities and skill development and community investments."

Sabrina SIA, Leader of Global Employer Services at Deloitte Singapore:

"It’s expected that there were no changes to the individual tax rates given the current economic climate and the last change was fairly recent. The outbreak of the Coronavirus virus is also expected to have quite a significant impact to businesses and economies if the situation becomes prolonged."

"It was somewhat surprising that no personal tax rebates had been announced for the Year of Assessment 2020 (income year 2019), especially given the coronavirus situation. However, direct cash payouts were announced instead to help families cope with living expenses during this trying period.  Such payouts would reach a wider population rather than tax rebates, given that quite a significant population of Singaporeans do not pay taxes."

Daniel HO, Tax Partner and Mergers & Acquisition (Tax) Leader at Deloitte Southeast Asia:

"As the economy marches towards a digital future, the emphasis on developing a world class workforce cannot be understated. The Minister’s attention to both ends of the workforce spectrum in this budget: local and overseas internship opportunities for young students and emphasis on redesigning jobs and reskilling older workers for the digital economy are testament to the fact that the Minister is indeed walking the talk."

"The jobs support and wage credit schemes provide timely funding and help to retain jobs during these difficult times."

"Faster tax write-downs for capital expenditure and renovation spending can help to relieve cash flow for businesses but the tax benefit is only realised a year later so may not offer immediate relief to businesses."

"As widely expected, this year’s Budget brings lots of good news to businesses and individuals, and shows the Government’s nimbleness and financial strength to be able to provide timely relief whenever dark clouds appear."

"As part of Singapore’s Transformation and Growth strategy to develop its people, the Lifelong Learning initiatives introduced for Singaporeans, including the one-off SkillsFuture Credit top-up, further demonstrates the Government’s recognition of the importance of education and learning, and reinforces its commitment to help Singaporeans remain employable and relevant in today’s dynamic environment for as long as they need."

"The corporate tax rebate of 25% for the Year of Assessment 2020, capped at S$15,000, will not benefit corporate taxpayers which are not in a tax paying position this year. However it is still a welcomed move especially for the tax-paying smaller businesses as it puts cash back to them on a timely basis."

ONG Siok Peng, Tax Partner at Deloitte Singapore:

"With the US-China trade dispute impacting Singapore business segment significantly and the COVID-19 outbreak lowering Singapore’s economic growth prospects, the stabilization and support package along with enterprise transformation package for SMEs which are the backbone of Singapore economy are indeed a welcome sign of relief in these trying times."

"The Jobs Support Scheme offset 8% of the wages of every employee who is a Singaporean or permanent resident for three months, up to a monthly cap of $3,600 and additional support given to sectors directly impacted by the current COVID-19 outbreak will be of great help to retain jobs."

"The Government is committed to foster environmental sustainability locally and globally through innovative green solutions, including mobilizing our community by introducing incentives to help lower-income households to choose more energy-efficient household appliances."

"This Budget is not only a strong boost in anticipation of Singapore’s upcoming short-term and long-term economic uncertainties arising from the COVID-19 outbreak but also a progressive one for which it continues to fortify the foundations built by the past Budgets."

"The property tax rebate for 2020 will come in handy for companies within the five affected sectors as it will help them off-set their operating costs due to the economic slowdown brought by COVID-19 outbreak from a cash flow standpoint. Their tax bill will also be reduced as the Government has provided accelerated write-down on plant and machinery and renovation and refurbishment expenditure incurred in 2020."

CHAI Sook Peng, Tax Partner at Deloitte Singapore:

"To continue strengthening the giving culture in Singapore, government will provide support to community which include dollar to dollar matching donation to IPC on top of the current 250% tax deduction. This will generally help the community but does not really have direct benefit to the businesses. It would have been more practical from a business point of view to further increase the 250% tax deduction."

"To help those who have not been able to save more, government will introduce the “Match Retirement Saving Scheme” for 2021 -2015 for eligible Singaporean aged 55-70 who makes contribution to VRS account and such Match Retirement Saving Scheme will be cap at $600 per annum.  While the initiative is welcoming, given the high average life expectancy in Singapore and the fact that Singapore’s medical costs are perceived to rise at a faster pace than most of the region, the Match Retirement Saving Scheme would hopefully be  further enhanced in the near future."

Rohan SOLAPURKAR, Tax Partner at Deloitte Singapore:

"The package to tackle COVID-19 is outstanding! The Government recognizes the challenges faced and is willing to put cash into the pockets of those affected, in particular, the corporate tax rebate and reliefs will be very welcomed for sectors and businesses affected by the situation. This swift action shows that the Singapore Government is responsible, and is able to form true partnerships to react in emergencies."

WONG Chee Ming, Tax Partner at Deloitte Singapore:

"Given the economic significance of the growing digital economy as well as the increased regional and global competition to be at the forefront of the digital landscape, it is encouraging to know that Singapore government has set aside budget to support deep-tech start-ups in an effort to seize economic growth opportunities in the digital age."

"With the subdued economic outlook in 2020, and modest growth prospects for the Singapore economy, the enhanced measures which support businesses in managing manpower costs and transformation as well as upskilling workers will help drive investor confidence."

Christina KARL, Tax Partner and Immigration Leader at Deloitte Singapore & Southeast Asia:

"Following the Government’s reduction on the foreign worker quota for the service sector in 2019, this year’s budget brings another round of reductions specifically for the construction, marine shipyard and process sectors. The Government continues to focus either on ensuring these roles are filled by skilled Singaporeans or for those benefiting from the Government reskilling schemes. We anticipate this sector will continue to be under the Government’s spotlight until they see a redressing of work force."

"No impact in this year's budget to the highly skilled foreign workforce who continue to play an important role in Singapore’s growth strategy. While no specific measures have been put in place, employers must continue to ensure they are looking at the Singapore work force prior to hiring foreign talent. MOM continues to get the balance right in the continued pull on global talent while protecting jobs that should be filled by Singaporeans."

Richard MACKENDER, Indirect Tax Leader at Deloitte Singapore, Southeast Asia and Asia Pacific:

"In an effort to push Singapore to the forefront of AI and shape it as a leading smart city, it is crucial that we are aware of the impeding cyber security threats.  As a city state, the Government recognizes the threats we face as a small country and the $1bn budget set aside in this budget for cyber security threats shows that we stand ready and united against any threats, including digital."

"The announcement of the expected GST Rate increase being held back until nearer 2025 is not a surprise in light of the economic environment and Singapore's careful stewardship of reserves. The key is certainty for businesses and consumers. The Government's statement is welcomed for the clarity it provides.”

“The Government's focus on start-ups in the bio, pharma and agri-tech sectors is essential for ensuring that Singapore stays relevant in emerging tech. It will certainly help to deepen the start-up ecosystem here and further encourage innovators to move to Singapore."

LIEW Li Mei, Tax Partner and Singapore International Tax Leader at Deloitte Singapore:

"The Government’s continual commitment in investing in skill development demonstrates the government’s recognition that education and training is the key to sustain individual employability, economic transformation and create growth."

"The new Asia-Ready Exposure Programme targets 70% of students from Institutes of Higher Learning to gain exposure overseas with 70% of the exposure in Asean, China and India. As we go global at a faster rate than ever, this new programme will indeed help local students gain valuable experience and a broader world view that will stand them in good stead to build their careers whether locally or globally."

"There has been much news around on-going discussions to revise international tax rules  under the Base Erosion and Profit Shifting project. Other than a brief mention that the Singapore continues to participate in international discussions and work with other members of the OECD to achieve a consensus-based solution, we wait to see if and how Singapore may tweak its current tax system as international rules evolve."

LEE Tiong Heng, Tax Leader, Technology, Media & Telecom at Deloitte Singapore:

"Recognising Deep-Tech Startups' challenges in raising financing from private investors as well as Venture capital funds and yet their importance to the overall economy, we applaud the Government's additional $300m funding to Startup SG equity to plug this gap in funding."

"The expansion of the Market Readiness Assistance grant to cover free trade agreement consultancy services and the increase of grant size from $20k to $100k per new market per company will be much welcomed by local enterprises seeking to venture overseas. The grant will help defray significant portion of the initial costs of accessing new market."

"Good news for profitable and tax paying corporate taxpayers. Corporate tax rebate of 25% capped at $15k has been announced."

"Introduction of SkillsFuture Enterprise Credit is an innovative move by our government to provide targeted support for SMEs in their business transformation, job redesign and skills training. The credit amount of $10,000 per enterprise will likely benefit small and medium enterprises much more than the large enterprises."

James WALTON, Transportation, Hospitality & Services Sector Leader at Deloitte Singapore:

"Definitely a more near-term focus for the transportation and tourism sectors with necessary boosts for hotels, MICE venues, aviation and point-to-point transport as well as retail and F&B. The Government is keen to avoid retrenchments as shown by wage offsets, corporate and property tax rebates, bridging loans and rental waivers. These measures are very welcome and should help our Singapore businesses ride out the anticipated slowdown in the sector."

THIO Tse Gan, Cyber Risk Leader at Deloitte Singapore and Southeast Asia:

"The move to set aside $1 billion over the next three years to build up country’s cybersecurity and data security capabilities demonstrates that the government is putting in more emphasis on cyber security as the country progresses in the digitalization of our economy. This amount must be spent in the right areas to ensure that our economic pillars are safeguarded against cyber risk."

WONG Meng Yew, Tax Partner and Global Trade Advisory Leader at Deloitte Singapore and Southeast Asia:

"In the ongoing march towards internationalization, the Government’s announcement to allocate funds under the Market Readiness Assistance Grant to help local SMEs obtain FTA advisory support to expand their business overseas will allow companies to enter new frontiers both regionally and globally. This will help businesses who are today already in markets outside Singapore but wish to expand into more markets, and new entrants to the overseas markets space."

"Following efforts announced in Budget 2019 towards enabling Singapore to play its part in combating climate change and to ensure sovereignty and existence for future generations, Budget 2020 has introduced more concrete goodies. The rebates of up to 45% on additional registration fees and reduction in road tax may just be what consumers need to tip the scale in terms of abandoning traditional ICEs in favour of hybrids and EVs!"