SINGAPORE - Deloitte Singapore has called for a variety of tax incentives and reforms that it believes will attract international investors while helping local businesses and residents, in its wish list for the upcoming Budget.
These include raising the child relief that parents can enjoy on their personal income tax and expanding the Productivity and Innovation Credit (PIC) scheme that has been popular among small and medium-sized enterprises (SMEs) here.
The accounting and consulting firm said the Government should also continue its efforts to pursue tax treaties with emerging trade partners and re-negotiate existing agreements where other countries have obtained more favourable terms.
This would help maintain Singapore's competitive edge as a regional hub, Deloitte said.
To help local businesses in their drive to increase productivity and innovation, it suggested tweaks to the PIC scheme.
For example, it recommended increasing the cash payout that companies can claim under the scheme, instead of limiting it to $100,000 for each year of assessment.
And to encourage SMEs to grow and build critical mass via acquisitions, the mergers and acquisitions tax allowance scheme should be extended, Deloitte said, and perhaps enhanced to allow tax deduction for interest costs incurred in share acquisitions, and not just asset acquisitions.
To meet Singapore's social objectives and to better the lives of residents, Deloitte's wish list includes suggestions to enhance the personal tax regime.
"With the Government's efforts to boost the nation's birth rates, Deloitte Singapore proposes to increase the quantum of child relief to $8,000 as the current child relief accorded (of $4,000 a child) may not adequately address the financial burden that most parents face," the firm said.
As Singapore residents grapple with higher healthcare costs, Deloitte suggested allowing tax relief for one's own or dependents' medical or hospitalisation insurance.
Furthermore, the firm added, the Government could allow tax relief for mortgage interest incurred on owner-occupied properties.
"Allowing taxpayers to claim such a relief will partially mitigate the financial strain of owning a property given the run-up in property prices in recent years and is in line with the Government's policy to encourage home ownership."
