Singapore Firms Call for Measures to Help Businesses With Rising Costs

Amidst an uncertain global outlook, companies in Singapore hope that measures in Budget 2012 will help them manage costs and avoid retrenchments. This is according to a new report published by KPMG resulting from a Singapore pre-2012 Budget forum it organised at the end of October 2011.


“Looking ahead to Budget 2012, many companies are hoping to see measures introduced to help them manage rising business costs, especially amidst an uncertain global outlook," says Tay Hong Beng, Head of Tax Services at KPMG in Singapore.


An audience poll found that more than half of the forum’s attendees consider high business and labour costs to be the key short-term business challenge.


Thirty percent of respondents indicated labour costs as the key challenge facing their organisation over the next year and 25 percent identified this as operating costs.


Close to half (45 percent) hope to see more measures to keep business costs down unveiled in Budget 2012, while 29 percent feel that more double-tax agreements and negotiating better terms for existing agreements would help strengthen Singapore’s position as a gateway to Asia.


A quarter (25 percent) see tax exemption on all foreign-sourced income as similarly necessary; and 38 percent felt that further reductions in corporate tax rate were unnecessary, but more deductions and incentives would be welcome.


“Companies in Singapore are also facing rising costs, thinning margins and intensifying competition.


All this ultimately threatens job situation in Singapore and prospects for economic growth,” adds Tay.


Among the key proposals for Singapore Budget 2012 arising from the forum include measures to help businesses with rising costs; extend corporate and individual tax rebates and SME cash rebates; tax deductions for capital-raising expenditures; and review existing tax incentives to ensure continued relevance.