[Singapore] 2015's GDP performance was the weakest performance since 2009 and market outlook for the year 2016 remains gloomy. China’s economy slowdown, low crude oil price, financial market volatility and global economic uncertainties has set private economists forecasting growth in 2016 to be around 1.9-2.2 per cent.
Amid the poor economy outlook for the year 2016, the Singapore Budget 2016 announced by Finance Minister Mr Heng Swee Keat on 24 March 2016 has unveiled short-term solutions for business, especially Small Medium Enterprises (SME), to ride out the current economic uncertainties through announcement of various tax incentives and grants.
The budgets consists of a balance between interim support for companies and long-term transformation initiative to bring Singapore companies to the next stage of economy transformation to be in line with the vision of becoming a “Smart Nation”.
Firstly, the short-term supports provided, ranges from the increase in Corporate Income Tax (CIT) rebate from 30% to 50%, extending Special Employment Credit to the introduction of SME working capital loan.
Next, the Government upheld its view on growing businesses through productivity, innovation and internationalisation. The PIC scheme, introduced in budget 2010, will be lapsed in YA 2018 and will be replaced with the Automation Support Package. The automation support package will consist of enhancing existing grants available and introduction of new scheme/measures which will be administered by SPRING Singapore. As further details will only be released in the coming months, it remains to be seen if the conditions attached will be viable for SMEs to tap on this scheme to grow their businesses. To encourage company to expand their international presence, the double tax relief for internationalisation has been extended.
Minor changes were noted for individual tax payer except for high-income working mother as personal relief will be capped at $80,000 from YA 2018 onwards. Extensions and enhancements to incentives for the finance, insurance and maritime sectors were also announced.
I hope you will find this commentary useful and look forward to supporting you as you grow your business in the coming years.
Quals Business Consultants Pte Ltd