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FOCUSISCA PRE-BUDGET ROUNDTABLE 2017

ISCA PRE-BUDGET ROUNDTABLE 2017 PANELLISTS

BY

PERRINE OH AND LOKE HOE YEONG

ISCA PRE-BUDGET ROUNDTABLE

Advancing our Future: Adapt. Innovate. Change

2017

T+ (Co-Chair)

GERARD EEPresident

Institute of Singapore

Chartered Accountants

+ (Co-Chair)

LIANG ENG HWAChairman

Government Parliamentary

Committee for

Finance, Trade & Industry

IS Chartered Accountant 14

February 2017 15

+ ANG YUITVice President

(Membership & Training)

Association of Small &

Medium Enterprises

+ CHIU WU HONGHead of Tax

KPMG in Singapore

+ R. DHINAKARANPresident

Singapore Retailers

Association

+ HO MENG KITChief Executive Officer

Singapore Business

Federation

+ JIMMY KOHHead of Investor Relations

& Research

UOB Ltd

+ KON YIN TONGManaging Partner

Foo Kon Tan LLP,

Vice President

Institute of Singapore

Chartered Accountants

Panellists (seated, from left) Cindy Lim, Tax Partner, RSM Tax Pte Ltd; Augustine Tan, President, Real Estate Developers’ Association of Singapore; Ho Meng Kit, Chief Executive Officer, Singapore Business Federation; Co-Chairs Gerard Ee, President, Institute of Singapore Chartered Accountants (ISCA) and Liang Eng Hwa, Chairman, Government Parliamentary Committee for Finance, Trade & Industry; R. Dhinakaran, President, Singapore Retailers Association; Kon Yin Tong, Managing Partner, Foo Kon Tan LLP and Vice President, ISCA; Prof Sum Yee Loong, Board Member, Singapore Institute of Accredited Tax Professionals; (standing, from left) Low Hwee Chua, Regional Managing Partner, SEA Tax and Legal, Deloitte & Touche LLP; Kenneth Loo, President, Singapore Contractors Association Limited; Erman Tan, President, Singapore Human Resources Institute; Chiu Wu Hong, Head of Tax, KPMG in Singapore; Victor Mills, Chief Executive, Singapore International Chamber of Commerce; Jimmy Koh, Head of Investor Relations & Research, UOB Ltd; Ang Yuit, Vice President (Membership & Training), Association of Small & Medium Enterprises

FOCUSISCA PRE-BUDGET ROUNDTABLE 2017

+ PROF SUM YEE LOONGBoard Member

Singapore Institute of Accredited

Tax Professionals

PRESSING ISSUES FACED

BY BUSINESSES

+ CINDY LIM Tax Partner

RSM Tax Pte Ltd

+ KENNETH LOOPresident

Singapore Contractors

Association Limited

+ LOW HWEE CHUARegional Managing

Partner, SEA Tax and Legal

Deloitte & Touche LLP

+ VICTOR MILLSChief Executive

Singapore International

Chamber of Commerce

IS Chartered Accountant 16

February 2017 17

The Roundtable brought together leaders of trade bodies, accounting firms and C-suite executives to discuss and provide recommendations on Singapore Budget 2017

+ ERMAN TAN President

Singapore Human

Resources Institute

+ AUGUSTINE TAN President

Real Estate Developers’

Association of Singapore

FOCUSISCA PRE-BUDGET ROUNDTABLE 2017

KON YIN TONG

KENNETH LOO

CHIU WU HONG

INTERNATIONALISATION

HO MENG KIT

R. DHINAKARAN

R&D AS A KEY COMPETITIVE

AND INNOVATION DRIVER

IS Chartered Accountant 18

February 2017 19

ERMAN TAN

ANG YUIT

ATTRACTING AND

RETAINING TALENT

VICTOR MILLS

JIMMY KOH

(From left) Mr Liang and Mr Ee co-chaired ISCA Pre-Budget Roundtable 2017

FOCUSISCA PRE-BUDGET ROUNDTABLE 2017

TAX MEASURES TO

ALLEVIATE BUSINESS COSTS

LOW HWEE CHUA

AUGUSTINE TAN

CINDY LIM

+ Increase the cap and number of years allocation for the Loss Carry-Back Relief for

companies, as it is currently only for one year and up to $100,000.

+ The wage credit scheme should be extended, given the current difficult economic times

for businesses and employees alike.

+ To further help SMEs grow and internationalise, the government should reconsider

the conditions under the mergers and acquisitions (M&A) allowance scheme – such as

the requirement for acquiring companies to carry on a trade or business in Singapore

on the date of share acquisition and to have at least three local employees (excluding

company’s directors) throughout the 12-month period before the date of share

acquisition – which should be relaxed due to practical commercial reasons.

+ In light of the new digital economy, there were suggestions on enhancing tax deduction

and allowance for software and other related payments. Such enhanced tax deduction

and allowance has the effect of incentivising businesses (and in particular, SMEs) to

invest in technology and other enablers of productivity and innovation, especially in the

new digital economy.

+ Singapore has the potential to be a hub for cargo movement. Incentives, such as

double tax deduction schemes to benefit business activities in growth sectors like

supply chain management, should be introduced to transform Singapore into a hub

for cargo movement.

+ To help companies venture overseas, the foreign tax credit system should be enhanced.

Currently, it cannot be carried forward or backward. Singapore companies may not have

sufficient Singapore tax in Singapore, and would have to forfeit the foreign tax credit received.

+ Introduce property tax exemptions to buildings undergoing regeneration/additions/

alterations. This would encourage owners to retrofit and upgrade their buildings as well

as adopt innovative solutions, in line with the government’s effort to rejuvenate the city

and ensure a more sustainable environment.

+ Review the current basis of property tax assessment for vacant land. A more equitable

system would be to tax the land on the basis of a value that takes into consideration its

lease term. The current basis of 5% of land value as the annual value of vacant land or

land designated for redevelopment is much higher than the 2% to 3% annual yield from

land investment.

Table 1 Tax measures to help alleviate business costs

IS Chartered Accountant 20

February 2017 21

PROF SUM YEE LOONG

CONCLUSION

ISCA

Perrine Oh and Loke Hoe Yeong are Managers, Research, ISCA.

Mr Ee presented a token of appreciation to Mr Liang for co-chairing the Roundtable

Table 2 Ideas and measures to increase revenue

+ Do away with full tax exemption for new businesses for the first three years.

As the Inland Revenue Authority of Singapore (IRAS) has highlighted in the past,

this exemption has been liable to abuse, such as through the under-reporting of

company profits.

+ Raise property tax on vacant, second and subsequent properties owned by multiple-

property owners. This will induce them to let out their properties, which would make

the residential rental market more affordable.

+ IRAS could consider bringing foreign suppliers into their Goods and Services Tax

(GST) net. Offshore suppliers for digital goods and services should pay GST, which

would be important for levelling the playing field for domestic players in this area

who are liable for GST.