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Deloitte Singapore proposals for Budget 2020
With multilateralism under threat and its attendant effects on the global economy, Singapore should continue building our fundamentals and pushing ahead with our economic transformation.
A unique and distinct Singapore
Budget 2020 is expected to be announced amidst an unprecedented global retreat from multilateralism and its attendant effects on the global economy, which is anticipated to contract further. Singapore’s 2019 growth forecast has also been slashed to 0.6 percent, down from an earlier estimate of 2.1 percent in June, based on a recent report.
Even so, the Government’s readiness to help businesses and workers should the economy take a turn for the worse is reassuring. This does not mean that businesses should rest on their laurels as we continue with our economic transformation and adapt to global changes. The challenge lies in how will businesses plan and prepare ahead.
Developing and deepening workers’ capabilities remain one of the clear themes of our economic transformation. Extensive resources have been dedicated to ensure that workers, being the core of Singapore’s economy, could continue to succeed in their jobs. Human capital can no longer be perceived as how much revenue a person could generate for the business, but how much value a person could bring to a business in his entire career. Different value propositions could be brought in by an individual at different stages of his career—some values are tangible, while many are intangible.
“Tax certainty” has also started to diminish over time. Whilst businesses are still adjusting to the aftermath of the Base Erosion and Profit Shifting project, ongoing international developments on a unified tax framework to address challenges arising from the digitisation of the economy, coupled with interim unilateral measures, has further created uncertainty for businesses.
We echo the Prime Minister’s sentiments in the recent United Nations General Assembly that “a rules-based multilateral system is still far preferable to any other way to secure peace and prosperity, and to solve global problems”. Nevertheless, Singapore must be nimble and carve a niche for itself by offering businesses a safe harbour amidst such volatile times by reinforcing tax certainty on certain domestic provisions, in order to continue promoting investments and innovation in Singapore.
Singapore has always prided itself on, among others, a strong rule of law, well-trained high quality workforce and excellent infrastructure. These fundamentals have distinguished Singapore and served it well for many years and we must continue to build on them. In doing so, Singapore should remain well-positioned within the global community.
Deloitte Singapore is pleased to share our recommendations as we look forward to creating the future, together.