Singapore Businesses Worry About Rising Costs, Uncertain Global Demand and Increased Regulation

Rising business costs, especially rental cost, has emerged as the top key concern for businesses, according to research conducted by the Institute of Certified Public Accountants of Singapore (ICPAS).


Based on its pre-budget survey and polls which attracted a total of 575 respondents, ICPAS found that 60 percent of them worry that high business costs could be a major challenge even as businesses brace themselves for slower growth ahead. Another challenge businesses faced is difficulty with hiring, with 50 percent citing problems with manpower shortage.


Ahead of the Budget 2013, respondents have indicated that they hope the Government can lend a hand in managing rising business costs.


The survey finds that 60 percent felt cash grants to Small and Medium Enterprises (SMEs) would be beneficial, while 45 percent indicated a wish for the Government to consider reviving the Jobs Credit Scheme, as it has been found useful in retaining jobs during bad economic times.


Rental cost continues to be one of the top concerns related to business costs for SMEs. Eighty one percent want measures to reduce or offset rental cost as their top wish list item for companies in the coming Budget 2013.


Many suggested that the Government refine foreign worker policies to allow greater differentiation to meet the unique needs of the various industries.


With the reduction in Dependency Ratio Ceiling (DRC) and S-Pass quotas, 24 percent of the respondents indicated they experienced severe adverse impact on meeting their manpower needs.


Sixty percent of respondents polled indicated that they hoped to see customised quotas and ratios for industries which rely heavily on foreign labour.


The survey also finds that the PIC scheme is a useful tool to enhance productivity, but can be further refined to benefit more businesses.


Eighty percent of respondents indicated the PIC scheme has been useful in enhancing productivity, while 66 percent indicated their desire for the Government to extend the reach of the various productivity schemes by tailoring them to better meet the needs of companies in the professional as well as other services sectors.


Respondents also indicated they need more help to understand the schemes offered by SPRING and IE Singapore.


More than half (54 percent) of respondents, particularly those in business and industry, indicated that the double-tax deduction scheme is useful with respect to their internationalisation activities.


Sixty two percent indicated they want more help to understand the available schemes, while 71 percent want more financial support and information about regulatory and tax regimes in other countries to support them in venturing overseas.


Wish List for Budget 2013
Based on the survey findings, the respondents’ top wish list items for Budget 2013 are:

- Reliefs or grants to help SMEs better cope with rising business costs
- Greater support to reduce rental costs
- Calibrating manpower policies on foreign workers for different industries
- Refining PIC to benefit more businesses


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