Professional services firm PwC wants the income threshold for personal income tax to be raised from $20,000 to $40,000 in next year's Budget.
Taxable income beyond the first $20,000 is now 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 beyond the first $40,000, as a way of helping the country's middle class.
The firm has also proposed introducing reliefs, such as for medical insurance to encourage taxpayers to take up policies to supplement their MediShield coverage. It also proposed help for taxpayers employing foreign maids to help care for their elderly parents or parents-in-law.
These were among the recommendations PwC has submitted to the Ministry of Finance and the Monetary Authority of Singapore for consideration for Budget 2018.
Most of its proposals concern helping 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 (IP), and enhancements around research and development.
There were also proposals to encourage local businesses 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".
Mr Chris Woo, PwC Singapore's tax leader, said: "These changes will help secure Singapore's future as a hub for businesses globally and achieve a truly high-value digital economy."
PwC said multinational companies may not be able to transfer full ownership of their IP to Singapore in the light of legal or commercial constraints. Nonetheless, they should be encouraged to locate activities relating to IP in Singapore and exploit it from here, as this will create economic spin-off for the economy.
The firm suggested that the writing down of allowances for IP be extended to its "economic owner" in Singapore, without the need for prior approval from the Economic Development Board.
This would bring Singapore in line with countries such as Australia and Britain, where no distinction is made between the economic and legal owner of IP.
PwC also proposed that premiums for insuring against bond defaults be added to the list of prescribed deductible borrowing costs. This will help investors and companies in vulnerable sectors, given several high-profile cases of default.
It will also encourage issuers of such debt to insure against default, which will also protect investors.
PwC did not weigh in on the hot-button issue of a goods and services tax (GST) hike. Experts expect the levy to go up within the next few years, with an announcement expected as soon as next year's Budget. Instead, PwC made proposals on tweaking the rules for GST registration, simplifying tax invoices and extending GST concessions to non-share trades on overseas exchanges.