Professional services firm EY hopes next month's Budget will include measures to encourage innovation, attract regional companies to set up here and promote responsibility for health and well-being.
The firm noted in a statement yesterday that last year was a tough year for Singapore's economy.
"In view of the challenges and opportunities before us, Budget 2017 is an opportunity to take stock of existing tax legislation to encourage businesses to put growth at the top of their agenda and ease business costs - whether by tweaking their business models, going overseas or through mergers and acquisitions," said Mrs Chung-Sim Siew Moon, the head of tax services at Ernst & Young Solutions.
One of EY's suggestions is to introduce a "patent box scheme" or similar tax regime.
Such regimes offer preferential tax rates on income derived from intellectual property and aim to encourage innovation and research and development (R&D).
This would complement existing tax incentives that promote R&D and improve Singapore's attractiveness as a destination to conduct research and commercialise the resulting intellectual property, said business incentives advisory partner Tan Bin Eng.
EY also suggested adopting a pure territorial taxation system to attract regional companies.
Under existing regulations, not all foreign-sourced income is tax-exempt. A permanent tax exemption for all foreign-sourced income would encourage firms to grow beyond Singapore, the firm said.
"In the long run, it can boost Singapore's position as a launch pad for new industries with base operations in Singapore, including digital service sectors such as media, travel, fintech and gaming," said Mrs Chung-Sim.
Another idea involves devising less complicated tax policies for smaller companies.
"It is timely to look at introducing a simplified income tax code in the tax legislation for small companies with simpler tax rules on capital allowance claims and deductions to ease their compliance costs... this can make Singapore (have) a more conducive growth environment for start-ups and SMEs," said tax services partner Chai Wai Fook.
EY's Budget wish list - which joins a chorus of business associations, accountants and other groups giving suggestions in the run-up to the Feb 20 Budget - also contained tax-related suggestions for households and individuals, including an idea to provide tax deductions for medical insurance policies.
"Allowing a tax deduction that is not tied to Central Provident Fund contributions, subject to a cap of $5,000, for premiums paid for medical-related insurance by individuals for themselves or their family members... will encourage taxpayers to be more responsible for the health and well-being of themselves and their families," said people advisory services (mobility) partner Kerrie Chang.
"Enabling a tax write-off for health insurance premiums will not only encourage more taxpayers to take up health insurance policies for themselves and their families, but also offer them greater access to preventive and emergency healthcare."
