PwC Singapore has suggested that the tax rules should be adjusted in the next national Budget to cover pandemic-related spending and business needs, as follows:
Furthermore, Pwc also recommended enhancing tax deductions, capital allowances, etc. for emerging industries, especially cybersecurity investments. Otherwise, the government could encourage agri-food investments with tax breaks for farming income and tax deductions for capital costs on a farm building.
Despite the increasing pressure on tax incentive schemes, PwC urged tax incentives to continue in key segments such as manufacturing.
Other tax-related recommendations include granting tax relief for business digitalization expenditure (i.e data analytics or staff training, etc.), double tax deductions for virtual trade events, and removing the cap on companies’ tax deduction for employee medical benefits.
However, the Budget has to provide a balance in supporting sustainable transformation while increase needed government tax revenue for the overarching purpose of growing Singapore’s economy.
Prior to Covid-19, Singapore was already facing economic downturn. As a Smart Nation, Singapore is naturally seeing solutions to overcome the difficult situation propelled by the COVID-19 pandemic.
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