SINGAPORE - Professional services firm PwC is asking the Government to help the middle class in Singapore by raising the income threshold for personal income tax to S$40,000 from S$20,000 currently, in its wishlist for next year's budget.
Under the current progressive tax regime, taxable income beyond the first S$20,000 is taxed at graduated rates ranging from 2 per cent to 22 per cent. PwC would like to see the lowest two bands removed, with personal tax to start applying only to the first S$40,000 of taxable income.
The firm is also suggesting the S$80,000 cap on working mother's child relief be lifted to encourage married women to continue to stay in the workforce. The unpopular cap was introduced in last year's budget. Tax experts said then that working mothers earning above S$150,000 with at least two children would likely end up paying more tax.
PwC also proposed introducing other reliefs - such as for medical insurance to encourage taxpayers to take up medical insurance policies to supplement their Medishield coverage, and for foreign maid levy to taxpayers who employ helpers to care for their elderly parents or parents-in-law. The firm also suggested that reimbursement of medical and dental care to an employee's parents and parents-in-law not be treated as taxable benefits. This now only applies to the employee, his or her spouse and children.
These were among the recommendations PwC said on Wednesday (Dec 6) it has submitted to the Ministry of Finance and the Monetary Authority of Singapore for consideration for the upcoming Singapore Budget 2018.
But most of the firm's proposals have to do with helping Singapore businesses embrace digital disruption and encouraging innovation and enterprise.
Key among them was a call to enhance the writing down allowance for acquisition of intellectual property, and enhancements on the research and development (R&D) front to promote the creation of a more conducive environment to anchor high value added activities and intellectual property ownership (IP) in Singapore.
There were also proposals to encourage local businesses to reinvent themselves to expand their footprint locally and overseas including enhancing the double deduction for internationalisation and tax concessions for training and to help companies "go digital".
Said Chris Woo, PwC Singapore's tax leader: "These changes will help secure Singapore's future as a hub for businesses globally and achieve a truly high-value digital economy."