Reactions to Singapore Budget 2018
The Singapore Government announced its Budget for 2018 on Monday, and the key highlights for HR and businesses have been the increased funding for national skills programmes, continued focus on innovation and digital capabilities of workers, as well as the unveiling of new enterprise and human capital schemes.
Reactions to this year’s fiscal policy range from positive to cautious.
Tay Hong Beng, Tax Partner and Head of Real Estate at KPMG in Singapore, says the keen focus on internationalisation, innovation and enhancing digital capabilities will help grow Singapore businesses, but sees that more can be done.
“The next step is to look into how we can onshore more of such activities into Singapore using technologies and innovation. Any increase in the level of such activities will lead to a broader and more sustainable tax base rather than tax rates increase going forward,” says Tay.
In his budget speech, Finance Minister Heng Sweet Keat pointed out the emergence of new technologies and how it is changing the way people live, work and play, as well as reshaping the economy and jobs. From an HR standpoint, the key is for the function to champion the digitalisation efforts of their companies, says Karen Cariss, CEO and Co-Founder of PageUp.
“As technology advances, we’re going to see more and more modern technologies in our work lives and there are real opportunities for gaining competitive advantage, particularly for HR to lead the business,” says Cariss.
“It is therefore important for organisations to make sure they’re continuing to innovate with existing technology. It has the power to eliminate mundane tasks, thus freeing up time and space for the uniquely human characteristics of creativity and conceptual thinking.”
Here are some other reactions to the latest Budget.
On building deeper capabilities through programmes like the new Enterprise Development Grant, Double Tax Deduction for Internationalisation, SkillsFuture and Professional Conversion Programme:
“Disruptive technology (artificial intelligent and robotics) will displace jobs. While not all jobs will be affected and not all affected jobs will be eliminated, Singaporeans need to invest in continuous learning and deepen their skillsets to stay relevant.
- Samir Bedi, Partner, People Advisory Services, EY
“Proposed measure to increase expenses qualifying for automatic Double Tax Deduction for Internationalisation to S$150,000 will encourage local businesses to venture abroad.”
- Chai Wai Fook, Partner, Tax Services, EY
“Data analytics has been highlighted as one of the most sought-after skills in a market where the demand for talent with technical capabilities is increasing. The demand points towards a need for analytics at scale; where more people, not just data specialists, are able to use self-service analytics to make faster decisions and have a higher impact at their jobs.
Providing the right data tools and skills will make Singapore’s workforce more productive, while businesses will be able to keep pace with the constantly evolving business landscape.”
- JY Pook, Senior Vice President, Asia Pacific, Tableau Software
On the additional funding of S$145 million towards the Tech Skills Accelerator initiative:
“Security challenges have evolved rapidly over the years, increasing the demand for security services and driving innovation and the development of new technologies.
Advanced technology such as facial recognition, Artificial Intelligence and machine learning are increasingly embedded in the systems which keep us safe. These new technologies need people with the skills required to operate and maintain them, which is why we particularly welcome government investment in initiatives such as the Tech Skills Accelerator.”
- Benjamin Low, Vice President, Asia Pacific, Milestone Systems
On the new Capability Transfer Programme that aims to support the transfer of skills from foreign specialists to Singaporean trainers and trainees:
“This (agile) culture of excellence can be nurtured by supporting these game changers in developing the required skills and mindset. This means that the Capability Transfer Programme should also include support for highly skilled workers to seek further professional certifications, to future-proof our businesses and help our economy remain competitive on the global stage.
As digital transformation accelerates and automation displaces remedial tasks, Singapore must commit to re-skilling and up-skilling its workforce. This is not only true for low-skilled workers, but for high-skilled workers, such as accounting and finance professionals.”
- Jeff Thomson, President and CEO, Institute of Management Accountants
On the corporate tax deduction for the first S$200,000 of chargeable income being exempted from 2020:
“The restricted tax exemption for smaller companies and start-ups will inevitably add on to their costs.
I think the underlying intention for this is that profitable companies which may have benefitted from previous grants, schemes or tax rebates should also have a share in contributing back to the system.
This allows more SMEs to benefit from current grants and schemes that the government has put in place to prepare them to cope with the challenges of today’s business climate.
The effective tax rate is still very much lower compared to the headline corporate tax rate.”
- Jonathan Ho, Head of Enterprise at KPMG in Singapore
“The scaling back of the current tax exemption scheme for start-ups may affect companies that are cash-strapped in their initial years of business.”
- Chai Wai Fook, Partner, Tax Services, EY
What do you think of this year's Budget? Tell us your thoughts below or simply write to us at firstname.lastname@example.org.
Do also check out our in-depth piece on digitalisation in the March 2018 edition of HRM Magazine Asia.