Thursday 28 Mar 2024
By
main news image

SINGAPORE (Feb 22): Our journey towards SG100 continues with moving forward together — the Singapore Way — in Budget 2017.

The world is going through a period of great uncertainty and rapid technological change. In this year’s budget, the Finance Minister reaffirms the Singapore way to respond to such challenges. Singapore must take a learning and adaptive approach, try new methods, draw on feedback, adjust and refine our plans, as we move forward together with a can-do spirit.

Budget 2017 builds on the foundation laid out in Budget 2016. The Industry Transformation Maps have been launched for six sectors and will continue to be rolled out for the remaining 17 sectors within FY2017. The Adapt and Grow initiative introduced last year will be enhanced for both the Professionals, Managers, Executives and Technicians and rank-and-file workers in transition.

It is not surprising that the measures taken to build our capabilities for the long term are largely based on the strategies and recommendations put forth by the Committee on the Future Economy (CFE) two weeks ago.

Go digital, go international

Small-and-medium enterprises (SME) form the bulk of our enterprises and we can only be successful in transforming our economy if SMEs are able to use digital technology, embrace innovation and scale up. SMEs will receive support in adopting digital technologies to transform their businesses. Under the SMEs Go Digital Programme, SMEs will receive step-by-step advice, in-person help and funding on the technologies to use at each stage of their growth.

Enterprises can also tap on the enhanced International Finance Scheme to co-share risk on cross-border project financing. A new S$600m International Partnership Fund will co-invest with enterprises to help them scale up and internationalise.

Go green

We are beginning to feel the effects of climate change, such as prolonged drier and warmer weather. The government is planning to introduce carbon tax in 2019 to reduce greenhouse gas emissions. The proposed carbon tax will be applied upstream on power stations and other large direct emitters and the impact on most businesses and households is expected to be modest.  The carbon tax will be implemented after consultation with stakeholders. We hope the upstream industries take steps to reduce emissions by adopting clean energy and newer technologies.  

Changes are also made to the pricing and tax regime of diesel, motor vehicle and water to curb their consumption and usage. Water prices – last adjusted in 2000 – will now increase by 30%.

Go deep

The efforts to re-skill and up-skill our workers continue. Funding support for Singaporeans to take approved courses will continue to be available through SkillsFuture.  

A Global Innovation Alliance will be set up for Singaporeans to gain overseas experience and collaborate with their counterparts in other innovative cities. There will be programmes to enable our tertiary students to connect with start-ups overseas. This will hopefully help to change the mindset of our students and cultivate the entrepreneurial spirit in them.

Tax reform

One of the CFE recommendations calls for the review of Singapore’s tax system, to remain broad-based, progressive and fair, and at the same time, competitive and pro-growth.

Countries, large and small, are reviewing their corporate tax regimes to keep them competitive. No major changes has been introduced in this budget to reform our tax system, but the Minister alluded to what is coming. We can expect tax refinements in response to the Base Erosion and Profit Shifting project.

Businesses can also expect the government to raise revenues through new taxes or raise tax rates in order to fund rising expenditure in the mid to long term. One such option being studied by the government is the requirement for foreign-based e-commerce businesses to be GST-registered, as digital transactions are expected to boom.

With the creation and loss of jobs in different fields arising from the increased use of robots and artificial intelligence, the day may come where we cannot rule out that robots and artificial intelligence will be subject to taxation too.  

Go together

Budget 2017 placed great emphasis on building partnerships between different parts of society to create a more dynamic and resilient economy. The government is also committed to building an inclusive and caring society, which is important for the fruits of our growth to be enjoyed by all people in Singapore.

Our economic strategies for the next five to 10 years will be shaped by the strategies recommended by the CFE. Whether we can achieve the long-term economic growth target of two to three percent per year will depend on how well we partner one another to implement them.

As Martin Luther King Jr. said: “If you can't fly, then run; if you can't run, then walk; if you can't walk, then crawl; but whatever you do you have to keep moving forward.”
 
And the reason is simple.

Borrowing the words of Henry Ford, “If everyone is moving forward together, then success takes care of itself.”

The writer is Chung-Sim Siew Moon, Head of Tax at Ernst & Young Solutions. The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organisation or its member firms.

      Print
      Text Size
      Share