Singapore Budget 2024 Feedback

The economic forecast for Singapore in 2024 carries a tone of cautious optimism. The government forecasts a gradual improvement in Singapore’s GDP growth in the latter half of 2024, expecting it to approach its potential rate of about 1-3% for the whole year. However, this positive outlook is not without its potential disruptions, including new COVID-19 strains and rising geopolitical tensions.

As we navigate these changes, 2024 will be hailed as a landmark year in international tax reform, with the OECD's BEPS 2.0 initiatives taking effect. Singapore is proactively finalising its domestic legislation aligned with Pillar 2 and plans to implement such legislation from 1 January 2025, while keeping a close watch on the international tax arena to ensure that our economic and tax policies remain competitive and conducive to investment.

2024 also commemorates the 30th anniversary of the introduction of GST in Singapore, which has tripled from the initial 3% to 9%. Considering the higher GST amidst inflationary pressures, we anticipate that Budget 2024 will prioritise sustaining economic competitiveness and easing the cost of living.

Singapore has consistently ranked highly in the Global Innovation Index prepared by the World Intellectual Property Organisation. The government's unwavering endorsement of innovation through a suite of incentives underscores Singapore’s belief that innovation is important for driving competitiveness and economic progress. We suggest refining the R&D incentive structures to further catalyse the relocation of R&D activities to our shores.

In the realm of sustainability, Singapore remains dedicated to tackling climate change and fulfilling its commitments under the Paris Agreement. The increase in carbon tax rates from 2024, coupled with financial support for businesses to undertake decarbonisation initiatives will help accelerate Singapore’s transition to a green economy.

Our report extends beyond industry-specific insights, proposing broad reforms for the corporate tax system, incentives and personal tax regimes. Download the report now for a detailed exploration of our recommendations.