SINGAPORE - Media OutReach Newswire - 8 January 2024 - KPMG in Singapore (KPMG) and the Singapore Business Federation (SBF) are pleased to announce our joint Budget 2024 Proposal, designed to secure enduring prosperity for Singapore amid growing global uncertainties. 2024 AREAS OF FOCUS FOR SINGAPORE In 2024, Singapore is poised to cement its regional authority in innovation and climate change advocacy. To succeed, the nation must continue to position itself as an attractive destination for foreign direct investment, despite rising competition from other financial hubs. Singapore's focus must remain on bolstering its global competitiveness, equipping local enterprises with the capabilities to digitalise, decarbonise and expand abroad while fostering an optimal business environment. Smaller local enterprises, in particular, will be looking for more robust government support amid a challenging business environment. We recommend that the Government takes the lead to streamline procurement practices with smaller enterprises that may rely heavilyon government projects. To tackle manpower constraints, Singapore must maintain its openness to overseas talent and strengthen policies that promote the development of local talent. A public-private review of business competitiveness is needed to identify opportunities for cost mitigation even as we press ahead with industry transformation. In essence, Budget 2024 must demonstrate the country's decisiveness and confidence to: (1) Elevate Singapore's leadership as a competitive regional hub, (2) Empower local enterprises for global growth and competitiveness and (3) Enhance enterprise resilience and capabilities. Our recommendations detailed in our '3E framework' will form the strategic blueprint for building the country's competitive edge in a new reality. Highlights of recommendations are summarised below. Please refer to KPMG and SBF's Budget 2024 Proposal for more details (page numbers as indicated). Quotes from KPMG and SBF spokespeople are appended in Annex A. HIGHLIGHTS OF RECOMMENDATIONS1) Elevating Singapore's leadership as a competitive regional hub (p5) Budget 2024 provides the platform for Singapore to reinforce its status as a leading hub for business, wealth management and ESG investments. Near-term challenges, including the Organisation for Economic Co-operation and Development's Base Erosion and Profits Shifting (OECD's BEPS) 2.0 rules and increasing geopolitical tensions, have posed a new set of challenges for Singapore. As a country reliant on free trade and globalisation, this could also shake its competitiveness. But by leveraging its strengths, Singapore can emerge stronger by reformulating its tax incentive regime and spearheading new areas of growth, such as in innovation and climate financing. KPMG and SBF recommend:a) Strengthening Singapore's tax regime in a post BEPS era (p12) The Government can consider introducing new incentives that would fit into the category of Qualified Refundable or Marketable Tax Credits (QRTCs or MTTCs) to mitigate the impact of Pillar 2 for multinational companies affected by the new global minimum tax. To retain Singapore's competitive edge over other countries with higher corporate tax rates, the Government should also consider renewal of the existing funds tax incentive schemes without an increase in tied economic conditions, and to also re-examine the current tax incentive schemes for family offices, taking into consideration the investment culture and landscape. In addition, the Government should also re-examine tax incentive schemes for single family offices (SFOs). For instance, single family offices are not allowed to hold controlling stakes in private equity and venture capital investments if family members hold executive or managerial roles. This rule could come across as counterintuitive, as investors in these spaces are often involved in the strategic operations of such businesses. b) Spearheading Asia's innovation drive and expand Intellectual Property (IP) protection (p7-8) Singapore could broaden the definition of qualifying IP for corporate tax purposes and enhance the IP Development Tax Incentive. This could include incorporating a wider range of IP for writing down allowances such as customer lists and other marketing intelligence on approval basis. The IP Development Tax Incentive could also be enhanced to encompass patentable IP, considering the various forms of IP that businesses may not want to officially register to safeguard sensitive information like formulas and proprietary knowledge. This will further boost the regional innovation ecosystem and contribute to new opportunities for businesses. Singapore could also explore establishing a data innovation hub to facilitate seamless data sharing and connectivity across businesses, industries, and government agencies to drive efficiency and productivity improvements. c) Driving Singapore's regional leadership in climate financing (p17)...