Business leaders in Singapore are eagerly anticipating Budget 2025 with the hope that it will lead to simplified tax processes designed to reduce compliance and administrative burdens.
Companies are advocating for user-friendly filing methods, reduced documentation requirements, and improved access to tax advisory services. These priorities have been communicated to the Ministry of Finance and the Inland Revenue Authority of Singapore (IRAS) as part of the Singapore International Chamber of Commerce’s (SICC) wish list for the upcoming budget, which is set to be unveiled in February. The SICC, marking its 188th anniversary on February 8, stands as Singapore’s oldest independent business association, representing a diverse spectrum of enterprises ranging from multinational corporations (MNCs) to small and medium-sized enterprises (SMEs). In an interview with The Straits Times, Mr. Victor Mills, SICC’s interim chief executive officer and board advisor, outlined the chamber’s key tax-related requests.
Suggestions to Revise Refundable Investment Credit (RIC) While the introduction of the Refundable Investment Credit (RIC) in the 2024 budget was a positive development, many businesses feel it falls short of compensating for valuable benefits previously provided under traditional tax incentive programs. The SICC is advocating for a more streamlined RIC mechanism that could enhance flexibility for companies. This would include allowing businesses to offset the RIC across group entities and choosing between cash grants and RIC options. Furthermore, the government might consider reducing the frequency of surveys and audits on businesses by leveraging data from other incentive programs, such as the Global Trader Programme.
Proposals to Simplify Incentives and Grants There is a strong desire to simplify certain aspects of tax incentives and grants, particularly for foreign mid-cap businesses that have not been significantly affected by recent global tax reforms. This approach aims to ensure that large MNCs contribute a minimum level of tax corresponding to their operations in each relevant jurisdiction. SICC suggests enhancing eligibility criteria, simplifying application procedures, and reducing the complexity of post-approval compliance and reporting requirements as key measures to achieve this goal.
Reducing Administrative Burdens According to Mr. Mills, the introduction of e-invoicing regulations presents an opportune moment to evaluate the Assisted Compliance Assurance Programme (ACAP). This GST-focused program was launched to incentivize businesses to establish comprehensive control frameworks for accurate GST accounting. Since its initiation in 2011, over 1,000 businesses from various sectors have successfully applied for ACAP. As of December 31, 2021, more than 600 firms had achieved ACAP status, according to data released by IRAS. Businesses are requesting a limitation on the categories of supplies that fall outside of the InvoiceNow system, which would help alleviate administrative challenges and optimize program efficiency. Moreover, special concessions might be appropriate for businesses whose ACAP renewal timelines coincide with the new mandatory e-invoicing requirements, potentially allowing for a reduced scope or extended deadlines, as noted by Mr. Mills.
A Non-Tax Related Initiative On a different note, the SICC has also proposed an expansion of the Overseas Market Immersion Programme to support SMEs lacking overseas branches. This initiative aims to assist companies eager to explore international markets by providing reskilling opportunities for employees with minimal overseas exposure. The program offers salary support covering up to 70% of employee wages, capped at $5,000 per month, over a maximum period of nine months. Additionally, it subsidizes up to 70% of overseas allowances, capped at $3,000 monthly, to cover crucial recurring expenses like meals, transportation, and accommodation. “This initiative is designed to give Singaporean talent the chance to gain valuable experience in the overseas markets relevant to their companies,” Mr. Mills explained.
