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1. Proposals of tax incentives in Budget 2021

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:

• Extending tax relief for employees who had to set up home offices for telecommuting
• Letting businesses claim input tax in full for expenses (i.e office equipment, phone, utilities, etc.), given to employees as part of their efforts to work from home.
• Boosting the demand in the hospitality industry by the goods and services tax (GST) refund scheme for tourists.

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. 

2. Other tax-related recommendations

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.

If you require further understanding of Singapore’s corporate tax regime. Feel free to call/WhatsApp us at +65 90612851 or email us at  aceglobalacct@gmail.com. Alternatively, you may leave us a reply using our contact form below.

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