Deloitte calls for more tax incentives, treaties for Budget 2015

This article was first published on Jan 1, 2015

Accounting firm Deloitte Singapore wants the upcoming Budget to include tax incentives and reforms that it believes will attract international investors while helping local businesses and residents.

It urged the Government to continue its efforts to pursue tax treaties with emerging trade partners and renegotiate existing agreements where other countries have obtained more favourable terms. This would help maintain Singapore's competitive edge as a regional hub, Deloitte said.

It also suggested that tweaking the Productivity and Innovation Credit (PIC) scheme could help businesses in their drive to raise productivity and innovation.

For example, it recommended increasing the cash payout that firms can claim under the scheme.

Deloitte suggested introducing a scheme to reward innovative activities that are not within the ambit of the PIC scheme.

It also proposed that the mergers and acquisitions tax allowance scheme should be extended to encourage small and medium-sized enterprises to grow and build critical mass via acquisitions. The scheme could also be enhanced to allow tax deduction for interest costs incurred in share acquisitions and not just asset acquisitions, it said.

Deloitte's wish list includes suggestions to enhance the personal tax regime that it feels could help meet Singapore's social objectives and better residents' lives.

"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 health-care costs, Deloitte suggested allowing tax relief for a person's own or their dependants' medical or hospitalisation insurance.

The Government could also 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."