Audit firm Deloitte Singapore wants the upcoming Budget to include initiatives to encourage businesses to innovate and expand overseas.

It added that value-creation is more crucial now as slowereconomic growth is expected this year, while middle- and back-office jobs are under threat from lowercost locations.

The firm noted that these challenges mean fiscal policy should promote innovation, which would deliver new growth avenues and high-wage jobs.

The Government should spur investment in start-ups to make it easier for these innovative enterprises to expand. Tax incentives could also support businesses in digitisation and automation.

Deloitte also said that tax policies intended to attract overseas talent could be tweaked or expanded to create a level playing field for both local and foreign workers.

Companies could be granted additional tax deductions for hiring Singaporeans in management roles, for example.

The government should also encourage firms to internationalise. For instance, with the formal establishment of the Asean Economic Community at the end of last year, it could grant full tax exemption for income derived from foreign markets within the Asean Economic Community.

Singapore also needs to ensure its industry-specific tax incentives "evolve in tandem with business developments" to maintain the Republic's edge as a financial hub.

Although Singapore is a choice location for multinationals to set up regional treasury centres, Malaysia and Thailand have introduced tax incentives and may emerge as alternatives, Deloitte said. The Budget should also encourage research and development into technologies to transform financial services.

Also, in the light of growing healthcare costs, tax relief could be granted for medical insurance premiums.