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Reactions to the Singapore Budget 2013 Statement 

25 February 2013
Mr Tham Sai Choy, Managing Partner, KPMG in Singapore
The focus of Budget 2013 is on creating a better Singapore and a more inclusive society for all Singaporeans. This is a laudable goal, and demonstrates that the Government has listened carefully to feedback from all segments of society. It is heartening to see help for Singaporeans who would otherwise be left behind. We applaud the Government’s efforts to encourage greater social cohesion expanding our social safety network for those in need.

Mr Tham Sai Choy, Managing Partner, KPMG in Singapore
The announcements of Budget 2013 have the right focus. Improving productivity and innovation is important to improving the competitiveness of Singapore’s companies. As we strengthen these companies, we hope to see a greater focus on innovation and branding. Carefully designed incentives and grants can help to build flourishing Singapore companies with strong brands that fully capitalise on the growth in Asia. At the same time, their unique brand identities will help these companies to endure difficult times.

Mr Tay Hong Beng, Head of Tax, KPMG in Singapore
While we don’t see any drastic change to the income tax rates, we have to recognise and acknowledge that a considerable amount of money will be channelled to the lower income and those in need. We welcome that.

Mr Tay Hong Beng, Head of Tax, KPMG in Singapore
Improving productivity is an important initiative given the limited resources in Singapore. The enhanced tax incentives for productivity are worth applauding. However, it would have been more complete and holistic an approach if value-creation measures targeted at brand building and innovation activities also featured in this push to grow local businesses.

Mr Tay Hong Beng, Head of Tax, KPMG in Singapore
Our economy is moving towards a new paradigm and we have to recognise that. This Budget is very much focused on productivity and helping the lower income group as well as the elderly. We now await the details for implementation and execution, and look forward to more information about how it will reach and impact the targeted groups.

Mr Tay Hong Beng, Head of Tax, KPMG in Singapore
We welcome the corporate tax rebate and it looks to be an extension of the previous SME grant. However, like this grant – it does not seem to extend to sole proprietorships and partnerships. While sole proprietors and partnerships may benefit from the individual tax rebates, it is worthwhile noting that the individual tax rebate is capped at $1,500 and the corporate tax rebate at $30,000.

Mr Alan Lau, Partner, Tax, KPMG in Singapore
This year's Budget announcement has a strong SME focus. The Government has pulled out all the stops to help our local enterprises, but has not forgotten the bigger boys. A 30 percent corporate tax rebate will definitely help reduce business costs.

Mr Alan Lau, Partner, Tax, KPMG in Singapore.
The Government did not disappoint SMEs. The transition package has answered the calls of SMEs for more help. The focus is right, encouraging businesses to share the benefits from their productivity gains with employees.

Mr Alan Lau, Partner, Tax, KPMG in Singapore.
This Budget has listened to the calls of the man in the street for help in alleviating the rising cost of living. The focus on addressing income inequality and the introduction of workfare wage supplement is laudable.

Mr Chiu Wu Hong, Partner, Tax, KPMG in Singapore
This is a balanced Budget. It reinforces the message that the country has to go ahead with economic restructuring and with the initiatives to address higher healthcare and other costs of living.

Mr Chiu Wu Hong, Partner, Tax, KPMG in Singapore
Tweaks to the existing tax structures have made them more progressive, but this has to be done in a calibrated way to benefit more Singaporeans.

Mr Chiu Wu Hong, Partner, Tax, KPMG in Singapore
In intensifying Singapore's efforts to improve sustained productivity growth while tightening foreign workforce growth, care must be taken to ensure that labour-intensive industries are not neglected. Such industries need time to restructure their business models and undergo transitions to productivity-driven models.

Mr Chiu Wu Hong, Partner Tax, KPMG in Singapore
I am delighted that the Finance Minister has considered the challenges faced by the construction and services sectors. I am heartened that support will be provided to enterprises that desire to improve their productivity and reduce their reliance on the workforce through the proposed Quality Growth programme, the Wage Credit scheme and the Dependency Ratio ceiling cuts.

Mr Gordon Lawson, Partner, Tax, KPMG in Singapore
Singapore is one of the few countries in the G20 who can boast a budget surplus which affords us the luxury of only tinkering mildly with our economy while other countries are forced into more radical changes to their economic fabric merely to remain competitive.

Ms Gan Hwee Leng, Partner, Tax, KPMG in Singapore
GST vouchers are a sharp tool in a targeted approach to address the GST costs faced by lower income Singaporeans. The announcement of extra GST vouchers for all eligible Singaporeans and the additional $3 billion top-up to the GST voucher fund will further alleviate the rising cost for this group of Singaporeans. The increased reliance on such vouchers to address GST costs could be seen as laying the foundation and paving path for a future increase in the GST rate, to provide for social spending.

Mr Dennis McEvoy, Partner, Tax, KPMG in Singapore
The proposal to tax employers providing housing and hotel accommodation based on the annual value and cost will significantly increase costs for companies who also pick up the employee’s taxes on the benefit. This new measure will likely put downward pressure on housing budgets provided to employees.

Ms Lim Li Peng, Partner, Tax, KPMG in Singapore
Credit to the Government for taking measured steps to address the widening income gap, and re-distribute wealth from the better off to the lower- and middle-income groups.

Ms Gan Hwee Leng, Partner, Tax, KPMG in Singapore
The increase in excise duty for unmanufactured tobacco and other non-cigarette tobacco products is expected as will discourage smokers turning to cheaper alternatives for their smoking habits.

Mr BJ Ooi, Partner, Tax, KPMG in Singapore
This year’s Budget continues to up the ante in productivity in order that Singapore will achieve the quality growth expected of a developed economy, without forgetting the underprivileged, the low income worker, children and the elderly.

Mr BJ Ooi, Partner, Tax, KPMG in Singapore
Enhancements to Workfare will benefit 30 percent of the workforce. That’s indeed a significant boost and a large safety net to set up. Workers are going to rejoice since this is extra cash to spend.

Mr BJ Ooi, Partner, Tax, KPMG in Singapore
Full restoration of the employer CPF contribution rate to 16 percent for low-wage workers will certainly help boost the retirement savings much needed for this group.

Mr Lam Kok Shang, Partner, Tax, KPMG in Singapore
As expected, there was no change to the GST rate in this year’s Budget as our GST rate at 7 percent is already low compared to other countries. A quick comparison will show that the VAT/GST in the Asia Pacific region stands at about 12 percent, and internationally, the rate is higher at 15 percent. Furthermore, the government has addressed the regressive nature of GST via the permanent GST vouchers for eligible Singaporeans.

Mr Lam Kok Shang, Partner, Tax, KPMG in Singapore
Taken in its entirety, this is one Budget that tries to distribute the wealth across all segments in a more equitable manner. It is taking from what we would call the ‘right end of the bell curve’ to distribute to ‘the left’, as the government tries to live up to its promise of building a more inclusive society and to address concerns of a widening income gap.

Ms Gan Kwee Lian, Partner, Tax, KPMG in Singapore
The 3-year transition support scheme is very well designed. It helps both employers and Singaporean employees concurrently. The 40 percent co-funding by the government will allow employers to be more willing to increase the basic wages of low and middle income groups.

Ms Gan Kwee Lian, Partner, Tax, KPMG in Singapore
The 30 percent special corporate tax rebate will be welcomed by businesses, both big and small, as the tax rebate will contribute to a reduction of overall business costs.

Ms Mak Oi Leng, Partner, Tax, KPMG in Singapore
It is great that the Government has taken into account feedback from the ground, by acknowledging the need to have dynamic and re-energised SMEs.

Ms Mak Oi Leng, Partner, Tax, KPMG in Singapore
The Quality Growth Programme focusing on foreign worker policies, with a 3-year transition support package and strengthened productivity incentives, help address the concerns of Singapore SMEs over increased business costs and should motivate them to improve productivity levels.

Ms Mak Oi Leng, Partner, Tax, KPMG in Singapore
The intention behind the PIC Bonus Scheme to help small businesses is very positive. However, it may need some tweaking to simplify and make more accessible. It would also be better if the quantum of the PIC bonus is higher, above $5,000 a year.

Ms Mak Oi Leng, Partner, Tax, KPMG in Singapore
The change in property tax rates and higher ARF for luxury cars may help to redistribute wealth by containing the likelihood of future hikes in property and car prices in Singapore. This could result in more affordable property and car prices for many in Singapore and is certainly a welcome change.

Ms Anna Low, Partner, Tax, KPMG in Singapore
This is a Budget to help SMEs and Singaporeans cope with cost inflation and reduce the increasing income gap among Singaporeans. It is also targeted at levelling the playing field for SMEs and Singaporeans amidst pressures of increasing costs.

Ms Anna Low, Partner, Tax, KPMG in Singapore
The Budget measures continue with a carrot and stick approach to encourage businesses to invest in productivity.

Mr Leonard Ong, Partner, Tax, KPMG in Singapore
The thrust of this year’s Budget is to intensify the restructuring of the economy that began in 2010 in order to move Singapore up the value chain. Again, we see more emphasis placed on improving productivity and reducing the reliance on foreign workers.

Mr Leonard Ong, Partner, Tax, KPMG in Singapore
To address the widening income gap in Singapore in recent years, there is significant focus in Budget 2013 on enhancing social mobility to enable those who are less fortunate to move up the social ladder and on expanding our social safety network for those in the lower income group.

Mr Leonard Ong, Partner, Tax, KPMG in Singapore
The increase in property tax for investment properties used for residential purposes will result in landlords passing the costs on to tenants in the form of increased rents. Some property owners may also switch to buying commercial properties instead. This will drive up the cost of commercial properties and overall business costs.

Mr Leung Yew Kwong, Principal Tax Consultant, KPMG in Singapore on the changes in property tax rates
The change in property tax rates seems to be in line with the property cooling measures. The increase in property tax rate for non owner-occupied residential properties basically increases the costs of holding such properties. For owner-occupied residential properties, higher end properties are "penalised", whereas the lower-end properties are favoured.

Mr Leung Yew Kwong, Principal Tax Consultant, KPMG in Singapore on abolition of property tax refunds
The abolition of the property tax refunds for vacant buildings as announced in the Budget will increase the costs of holding of investment properties. Presently, the refunds provide some relief to owners whose buildings are unoccupied.

Ms Toh Boon Ngee, Partner, Tax, KPMG in Singapore
This is truly a Singaporean budget, addressing the immediate needs of Singaporeans and SMEs. It focuses on narrowing the income gap in the nation, improving productivity and reducing the reliance on the foreign workforce, as well as providing the much-needed support to the elderly and lower income group.

Mr Sharad Somani, Partner, Global Infrastructure Advisory, KPMG in Singapore
The Infrastructure sector is a fast emerging as a key growth engine for our economy. By facilitating an ecosystem of key project finance stakeholders – banks, advisors, contractors and specialised financing institutions, Singapore is positioning itself at the centre of the US$60 bn a year infrastructure market in SE Asia. The setting up of the World Bank group offices in Singapore is another pointer to the strategic intent of Singapore.

By positioning itself as an infrastructure finance hub, Singapore is rightly targeting high value add industries. The robust track record of Singapore in implementing successful infrastructure projects coupled with existence of strong home grown infrastructure companies, offer the right platform to take the industry to the next level.

As Singapore starts it journey towards increased productivity by focusing on high value industries, new sectors like Infrastructure have the ability to offer quality growth that we aspire for Singapore. The measures in the Budget are consistent with the recommendations of the Economic Strategies Committee, which has recommended the creation of industries that will act as economic drivers of the future.

Mr Lyon Poh, Partner, Management Consulting, KPMG in Singapore
Data analytics is a buzz word in recent years to describe the use of scientific/ statistical algorithms to increase business visibility to the enormous amount of data available on the companies' enterprise systems and internet/ social media. Under the various IDA's national infocomm infrastructure and industry development initiatives, Singapore is already positioning itself to be the preferred data cum analytics hub for regional headquarters of MNCs. As this is a relatively new area, many businesses are generally finding it a challenge to find qualified data analytics professionals who are be able to extract good business insights from the data collected. The measures in the Budget to develop 2,500 data analytics professionals, by offering training programmes via IHLs, should help to bridge the skill gap in the data analytics space and to support the growth of this industry.