This article was first published on Jan 13, 2015
Tax professionals want next month's Budget to be one that "not only talks cents but also makes sense".
The Singapore Institute of Accredited Tax Professionals (SIATP) urged the Government yesterday to do more to enhance competitiveness, support small and medium-sized enterprises (SMEs), provide a caring Singapore for Singaporeans and refine tax administration.
It asked for corporate income tax rebates to be extended for three years, until 2018, to mitigate the costs of doing business in view of the modest economic outlook this year.
The 30 per cent rebate, subject to a cap of $30,000 a year, is aimed at helping companies cope with rising business costs. It is due to expire this year.
The institute also asked for the merger and acquisition allowance scheme, which grants acquiring firms an allowance of 5 per cent of the acquisition's value, to be extended for another five years.
SMEs could be given more support by modifying the partial tax exemption and start-up tax exemption schemes.
They now receive a 75 per cent tax exemption on the first $10,000 of their chargeable income, while a 50 per cent exemption applies to the next $290,000.
An additional 10 per cent exemption should be introduced on the following $200,000 as well, said the body, adding that this will benefit SMEs with chargeable income close to $500,000.
The SIATP also turned to Singaporeans grappling with the rise in cost of living and called for an increase in tax reliefs to lessen the financial burden of individuals supporting their spouses, elderly or handicapped parents.
For example, a person can claim a tax relief of $2,000 for supporting his or her spouse - this is lower than the tax relief of $4,000 for supporting a child, it noted.
"To reflect an equal portion of the financial burden in supporting one's spouse and child, it is proposed that spouse relief be increased to $4,000," said the SIATP.
Institute chairman Gerard Ee added: "Such tax reliefs for the family reinforce the importance of the family as the basic unit of society."
Changes were also suggested to the tax administration system, including raising the GST registration cap from $1 million to $1.5 million.
This would help SMEs operating on thin margins to "save on additional administrative and compliance costs arising from GST registration", it said.
Processes such as estimated chargeable income filing and income tax filing should also be simplified to "lighten the administrative burden and ease the cash flow of small corporations", added the organisation.