Analysts say Budget moves help Singapore's competitiveness

Support schemes for green transition, R&D hailed, but they hope reach can be expanded

- Claire Huang

From giving incentives to draw global businesses and investors here, to improving the skills of the workforce, observers Budget say this continues year's to make Singapore's competitiveness a priority, but suggested tweaks to expand its reach.

Some analysts proposed more features to be added to the Refundable Investment Credit (RIC) scheme, while others cautioned against exacerbating economic disparities as the country moves towards high-tech ventures.

Mr Tan Tay Lek, PwC Singapore's corporate tax partner, said the introduction of the RIC scheme demonstrates Singapore's resolve, particularly as it comes in the face of international tax changes that are beyond the Government's control.

Under the RIC, companies that carry out work in areas such as green transition and research and development can get up to 50 per cent of support on expenditures like manpower costs and freight and logistics costs.

Mr Tan suggested that the Government can enhance the RIC scheme by making it available to businesses that are not as expenditure-heavy, such as tech solutions, but also bring economic activities to Singapore.

"For instance, if a firm achieves sales or revenue growth in Asia because of the investments in headcount, training, R&D in Singapore, the Government can give it the RIC," he said.

Ms Yvaine Gan, the global investment and innovation incentives leader at Deloitte Singapore, said the Government can look at having output-based features.

By this, she means that the RIC can include output or volume-based features, so the credits can be awarded based on a manufacturing company's volume of products made or a trading company's volume of trades that flowed through Singapore, which would then secure high-value activities here.