Singapore Budget Seminar 2019

The Singapore Budget Seminar 2019, jointly organised by Moore Stephens LLP and Complete Corporate Services (“CCS”), was successfully concluded at the Suntec City Convention Centre on 26 February 2019, attended by almost 200 delegates. Prominent guest speakers at the seminar included Mr James Cheo, Chief Market Strategist, Southeast Asia at HSBC Private Banking, and Mr Song Seng Wun, Director and Economist at CIMB Private Banking.

Mr. Cheo kicked off the seminar with an overview of key global economic developments to provide a backdrop for the budget. On the positive side, the US economy is enjoying a strong labour market, falling unemployment and a reviving manufacturing sector. The Federal Reserve has also become less aggressive with its interest rate hikes which have been a source of volatility. Outside the US, the Chinese economy is also benefitting from stabilising domestic consumption, increased bank lending, and a national focus on global innovation and technological advancement. According to Mr. Cheo, China has surpassed US in terms of investment in Research and Development particularly in Deep Learning and Artificial Intelligence patents. However, these positive factors are balanced by slower general economic world growth, and myriad geopolitical uncertainties including a possible no-deal Brexit, an unpredictable Trump administration, the tit-for-tat trade war between US and China, as well as upcoming elections in numerous ASEAN nations. 

Sharing Mr. Cheo’s views on a positive US economy, Mr Song also forecasted relatively high growth for ASEAN nations ranging from 2-7%. However, he was less optimistic on the Eurozone which started 2019 with the slowest growth in more than 5 years. According to Mr. Song, the economic growth outlook for trade-dependent Singapore will be stable for the coming years albeit at a relatively low rate, consistent with a slower global economic growth forecast.

On this note, Budget 2019 aims to promote growth through improving support for business globalisation and enhancing technological innovation. At the same time, it seeks to achieve inclusive growth and social mobility. Specific measures to attain these objectives were shared by Mr Yong Jiahao, Director of Taxation at CCS and Ms Law Pei Serh, Associate Director of Taxation at CCS. Participants were offered insights into details of various taxation changes arising from the Budget impacting corporate tax, personal tax and goods and services tax, as well as enhancements to grants schemes and other enablers to help firms scale-up, automate and globalize. According to Ms. Law and Mr. Yong, one major change was the extension of the Automation Support Package to 31 March 2021, which will allow more firms to receive grants, claim investment allowance and have improved access to financing for large-scale automation. Other schemes available include the Innovation Agents Programme, SME Co-Investment Fund III and a Digital Services Lab. On the personal front, the Budget encouraged businesses to re-skill and upgrade workers to stay relevant in the new landscape.

Besides the Budget, another key taxation development in Singapore is the Transfer Pricing (“TP”) requirements. According to Mr Lim Peng Huat, Director of Taxation at CCS, and Mr Chintan Shah, Senior Manager, Transfer Pricing, at CCS, companies should not underestimate the impact of the mandatory TP documentation requirements, associated non-compliance penalties, and regulatory surcharges for TP adjustments. Yet a further development for companies to note, are the taxation implications that will arise when the new financial reporting requirements for leases take effect in 2019, which was shared by Mr. Yong thereafter. 

The Seminar concluded with a panel discussion moderated by Mr Mick Aw, Senior Partner of Moore Stephens LLP. Topics discussed included the extent of support for local small and medium enterprises, and thoughts on additional support that could be sought in future Budgets.