Singapore Budget Commentary 2016
Covering the tax-related changes in Budget 2016
The Minister for Finance, Heng Swee Keat, presented the Budget Statement on 24 March 2016. The changes come at an important moment in Singapore’s development and will set the blueprint for Singapore’s transformation to ensure we overcome the expected challenges and steer the country towards SG100.
SMEs will find much cheer from this Budget. Among other changes, the Corporate Income Tax Rebate has been enhanced, application for grants will be made much easier with the introduction of the Business Grants Portal and support in the form of a new Automation Support Package (ASP) will be offered to firms for scaling-up of automation projects. With the PIC Scheme expiring after YA 2018, measures such as the ASP are but one example of a shift away from broad-based support for businesses to more targeted help. Acquisitive SMEs looking for expansionary opportunities in a cyclical downturn will be buoyed by enhancements to the M&A Scheme. The consecutive improvements to the M&A scheme in the 2015 Budget and 2016 Budget also demonstrate the importance placed by the Government on the need for SMEs to achieve sufficient scale to compete and survive in the Future Economy. Extensions and enhancements to incentives for the finance, insurance and maritime sectors were also announced.
On the social front, the Minister indicated a concerted effort to build a caring and resilient society. Various measures to nurture the young, such as the Child Development Account and the KidSTART initiative were introduced. The Silver Generation were also not forgotten with the implementation of the Silver Support Scheme and Community Networks for Seniors. Generous deductions will be accorded to both businesses and charitable organisations to support volunteerism of employees.
Subsequent to the increase in the top tier personal income tax rate last year, a cap of $80,000 on the amount of personal income tax relief has been introduced. This is not expected to affect the vast majority of tax resident individuals in Singapore.
More information can be found in the commentary.