Turning adversity into opportunity
KPMG's proposals for Singapore Budget 2012
Adversity can be the mother of opportunity. KPMG's proposals for the upcoming Budget 2012 are centered on a combination of strategic objectives underpinned by decisive short term measures to help businesses ride out the global uncertainty and seek opportunities for the future. Mr Tay Hong Beng, Head of Tax, KPMG in Singapore says, "Singapore steered through the 2009 global financial crisis relatively unscathed due to the Singapore Government's bold and decisive measures."
He added, "This year, we have gone beyond reflecting the wishes of the business community. We first polled a cross-section of businesses at KPMG's Pre-Budget forum in late 2011, and then worked out a series of proposals for the Government's consideration. We believe these will help Singapore forge ahead when the economic outlook improves."
Trends in the macro-economic environment
Asia may be experiencing slow economic growth due to global economic uncertainty, but economic adversity could also present opportunities for Singapore to turn itself into the most natural investment location for businesses.
At the Pre-Budget forum, an audience poll of 83 guests identified high business and labour costs as a key business challenge:
- 30 percent indicated higher labour costs and 25 percent said operating costs were key short-term business challenges
- 45 percent hope to see more measures to keep business costs down unveiled in Budget 2012
- 29 percent feel that more double-tax agreements and better terms for existing agreements are needed to help Singapore better position itself as a gateway to Asia
- 25 percent see tax exemption on all foreign-sourced income as similarly necessary
- 38 percent wanted more deductions and incentives instead of a lower corporate tax rate.
Mr Tay said: "Companies in Singapore are also facing rising costs, thinning margins and intensifying competition. In the immediate timeframe, measures to cushion the impact of the economic uncertainty are essential. However, these measures should support other efforts of promoting longer term high quality economic growth."
The four key themes KPMG hopes to see in Budget 2012 are:
- positioning Singapore as an Asian gateway
- growing Singapore enterprises
- enhancing innovation in Singapore
- providing measures for individuals
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