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ECONOMY | Staff Reporter, Singapore
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What you need to know about the Big 4's reactions to Budget 2021

Find out EY, Deloitte, KPMG and PwC's insights on the Budget.

Prior to Deputy Prime Minister Heng Swee Keat's delivery of Budget 2021 yesterday, Singapore's biggest accounting firms EY, Deloitte, KPMG and PwC have highlighted the need to address pandemic relief, workforce development, and digital innovation.

The FY2021 budget earmarked $11 billion for COVID-19 relief. Coming at the heels of the 2020 recession, the budget focused on the goal of "emerging stronger together", with recovery and sustainability at its forefront.

Over the next three years, $24 billion will be allocated to support the business sector. Funds for the extension of the Jobs Support Scheme will cost $700 million, targetting support towards the sectors hardest-hit by the pandemic.

On taxation, Heng reiterated the need to raise Goods and Services Tax (GST) "sooner rather than later" by 2022 to 2025. The implementation of GST for low-value imported goods has been moved to 1 January 2023.

New bonds under the proposed Significant Infrastructure Government Loan Act (SINGA) will be issued, with a limit of $90 billion, to fund infrastructure projects over the next 15 years.

The budget gave further details on the implementation of the Singapore Green Plan 2030, a long-term program that promotes green energy, waste reduction, and resilience to climate change at a national level. Up to $19 billion worth of green projects are set to be financed through the issuance of green bonds.

The government reported an overall budget deficit of $65.9 billion, or 13.9%, as the economy contracted by 5.4% in 2020. For FY2021, the government expects to continue running on an overall deficit of $11 billion to not only cushion the impact of the pandemic, but also to address long-term needs such as the ageing population and sustainability.

Here's what the Big 4 have to say on these matters:

Deloitte

Cheung Pui Yuen, Chief Executive Officer, Deloitte Singapore:
"In previous years, Singapore has taken tentative steps in terms of sustainability efforts. This year, Singapore is taking it to the next level with the Green Plan, to ensure that we are all doing our part to build a sustainable future at home and contribute as a responsible member of the international community. The Green Plan places emphasis on harnessing opportunities for technological advancements, innovations and entrepreneurship as the enablers for restructuring resilience and sustainable development, for example, through the new Enterprise Sustainability Programme to help businesses—especially SMEs—to focus on sustainability opportunities.

The message for the need for collective action from individuals to tackle the climate problem and achieve the Green Plan was felt strongly in the Budget. We can all reap the benefits and live in a clean and green Garden City when we transform our entire value chain sustainably."

Low Hwee Chua, Regional Managing Partner for Tax & Legal, Deloitte Singapore & Southeast Asia:
“Overall, this was a Budget with a vision—a Budget aiming to build on the emerging post-pandemic recovery and strengthen the ability of companies and entrepreneurs to continue to transform and grow; but also a Budget that recognises that drawing on reserves in the longer term is not sustainable and so set the scene for future tax changes ahead.”

Richard Mackender, Tax Partner and Indirect Tax Leader, Deloitte Singapore, Southeast Asia and Asia Pacific:
“It is not a surprise that the Government will change the GST treatment of low-value imports of goods so that overseas suppliers will be affected by GST in the same way as local businesses. But businesses will welcome the timeline of 2023 to get ready.”

Andrey Berdichevskiy, Director, Deloitte Future of Mobility Solution Centre:
“In the Singapore Budget 2021, it was announced that $30 million will be set aside over the next five years for EV-related initiatives, such as measures to improve charging provision on private premises. In addition, the minimum $5,000 additional registration fee will be removed to allow consumers to make full use of tax rebates of up to $45,000. These initiatives to increase the supply of charging stations and reduce taxes for EVs will help to mitigate current barriers of EV adoption in the country - with 34% of Singaporeans concerned about availability of charging and 20% concerned about the EV price premium, according to Deloitte's Global Automotive Consumer Study 2021.”

Daniel Ho, Tax Partner, and Tax Leader for Government & Public Services sector, Deloitte Singapore, says:
“COVID-19 has clearly opened the Government's eyes to what can be achieved in a digital and virtual environment, as well as the need for businesses to digitise and transform. SG Budget 2021 is flushed with a suite of measures to achieve this goal, with funding for operational digitalisation, funding for venture investments and even CTO advisory support. The Government indeed has foresight and is looking to turn a crisis into opportunity.

Budget 2021 sends a signal that businesses need to really think about how they can digitalise their processes and transform their operating model in the new business environment. They can tap on the schemes available and if new roles are created in the process, the JGI will come in handy too.”

Ong Siok Peng, Tax Partner and Tax Leader for Transportation, Hospitality & Services sector, Deloitte Singapore:
“Jobs and skills support packages awarded for accelerating the upskilling of workers to adapt to business digitalisation and transformation will help workers stay relevant and employable. As said by the Minister in his speech ‘Working from Home’ is just a short step to ‘Working from Anywhere’ - even as “working from home” becomes the norm and possibly “working from anywhere” in the future. Before allowing all employees to do so, businesses should carefully consider tax implications for both employees and businesses that may arise in different jurisdictions.”

EY

Soh Pui Ming, Singapore Head of Tax, Ernst & Young Solutions LLP:
"A holistic and well-calibrated Budget that further propels us to emerge stronger together, where we move from containing the pandemic to restructuring and capturing growth opportunities; from delivering broad-based to more targeted support measures; and from protecting to creating new, better and more productive jobs."

Chai Sui Fun, Partner, International Tax and Transaction Services at Ernst & Young Solutions LLP:
“Besides job creation, the Budget also focuses on strengthening infrastructure, capabilities and international collaboration for Singapore, which will go a long way to deepen Singapore’s long-term competitiveness and relevance.”

Chester Wee, EY Asean International Corporate Tax Advisory Leader and Partner, International Tax and Transaction Services at Ernst & Young Solutions LLP:
“Together, we can achieve more. Budget 2021 underscores this by emphasising collaboration and partnership between large and small businesses locally, and between Singapore and other countries globally.”

Amy Ang, EY Asia-Pacific Financial Services Tax Leader:
“The extension of the Job Support Scheme and other recovery reliefs serves as a reminder that the pandemic is not over, the fight is still on and we cannot be complacent. Yet, with every crisis, we must look for opportunities. The focus is to ensure Singapore businesses and workers transform themselves and be exceptional.”

COVID-19 Resilience Package

Chia Seng Chye, Partner, Tax Services at Ernst & Young Solutions LLP:
“The COVID-19 Resilience Package sends a clear signal that the government will support businesses that are prepared to fight through tough times to keep jobs so that they can respond confidently upon recovery.”

Samir Bedi, EY Asean Workforce Advisory Leader:
“The extension of the JSS is an additional sweetener for hard-hit industries like aerospace, aviation and tourism. For companies in these sectors, now is the right time to achieve their optimum level of transformation, protect and redesign jobs, and in turn, benefit not only themselves but also uplift the entire ecosystem in Singapore.”

Panneer Selvam, Partner, People Advisory Services at Ernst & Young Solutions LLP:
“The Jobs Growth Incentive has empowered employers to support differently enabled individuals, giving them fair employment opportunities and allowing them to be part of our caring and inclusive society. The extension of the scheme is welcomed and aligns with the country’s vision of emerging stronger together and leaving no one behind.”

Economic and workforce transformation

Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP:
“Singapore Budget’s new digital initiatives provide a strong boost to businesses looking to kick-start or accelerate their transformation journey. It is timely for enterprises to seize the opportunity to tap emerging technologies and nurture digital talents.”

Johanes Candra, Director, Business Incentives Advisory at EY Corporate Advisors Pte. Ltd.:
“The S$1 billion support for mature enterprises to invest in digital and emerging technologies will help Singapore business champions to lead, inspire and eventually bring along their respective industries and smaller companies to transform, scale and innovate.”

Samir Bedi, EY Asean Workforce Advisory Leader:
“The increase of government co-funding ratio from 70% to 80% sends a clear message that job redesign is inevitable to help organisations drive transformation yet enable employees to optimise their work with technology. Redesigning jobs is here to stay and the government is committed to supporting this.”

Singapore Green Plan 2030

Benjamin Chiang, EY Asean Government & Public Sector Leader:
“Singapore Green Plan 2030 is a bold whole-of-nation movement to create a sustainable, future-ready city. Climate change is a global challenge, and countries big and small – with their people – can and must do their part. Singaporeans can look forward to a greener environment that is harmonious with nature, and benefit from investments in research in sustainability and urban solutions. Further, initiatives such as the Agri-Food Cluster Transformation grant will help existing industries to develop new capabilities, pivot their business model to ride the growth in the “green” sector, and create new jobs.”

Adrian Ball, Partner, Global Trade – Asean at Ernst & Young Solutions LLP, says:
“Reducing additional registration fee on new electric vehicles (EVs) is supported by an increase in excise duties on fuel. Together with an enhanced investment in EV infrastructure, it is clear where the government is heading. Individuals will need to determine what these changes mean to them, but this pincer movement on costs and infrastructure should help accelerate the uptake of EVs in Singapore.”

Other tax policies

Yeo Kai Eng, EY Asean Indirect Tax Leader:
“With the rise of online shopping, it is not unexpected that the government has now decided to extend GST to imported low-value goods. This not only levels the playing field between overseas and local suppliers but also provides another source of revenue for the government.”

Chester Wee, EY Asean International Corporate Tax Advisory Leader and Partner, International Tax and Transaction Services at Ernst & Young Solutions LLP:

“BEPS 2.0 proposals, if implemented, are expected to change significantly the way taxing rights are being allocated among jurisdictions. As an investment hub location, Singapore may see a drop in corporate tax revenue. The corporate tax system needs to be reviewed and adapted in response to international tax developments. It is welcomed that the government will adopt a consultative approach when considering changes to our corporate tax system.”

Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP:

“The extension of various temporary tax schemes introduced in last year’s Budget, such as the enhanced carry-back relief, provides a welcomed reprieve to businesses that are hard hit by the COVID-19 pandemic and helps to ease their cash flow concerns as they continue to weather the storm brought on by the pandemic.”

KPMG

Catalysing a wide range of financial capital to transform and scale

Ajay Kumar Sanganeria, Head of Tax, KPMG in Singapore:
"Access to talent and skills is one of the hurdles local enterprises face in their digital transformation journeys. The Budget's Emerging Technology Programme, especially CTO-as-a-Service and Digital Leaders Programme, will help address this gap to drive greater digital transformation in local businesses."

Local Enterprises Funding Platform

Sharad Somani, Head of Infrastructure, AdvisoryKPMG in Singapore:
"The Local Enterprises Funding Platform announced is a missing piece of financing solution that has been plugged by making risk capital available to the industry for growth. It will be a critical driver for firms to leverage Temasek's experience and help drive regional growth, in turn creating a few national champions. While it is stated to be run on commercial market terms, it would be important to have terms that look at spinoffs holistically, rather than focusing only on commercial returns."

Job Supports Scheme

Tan Chee Wei, Head of Consumer & Retail, IGH & Manufacturing, Tax, KPMG in Singapore:
"The quantum of the extended Jobs Support Scheme of $700m signals the government’s commitment to support businesses in innovating, transforming and growing to seize opportunities in a post-COVID-19 economy, thus enabling them to emerge from this crisis stronger."

EV adoption measures

Satya Ramamurthy, Head of Infrastructure, Government & Healthcare, KPMG in Singapore:
"We welcome the changes in the tax and duty regimes which will enable Singaporeans make a decisive switch to Electric Vehicles. However, the $30M support for EV-related initiatives over the next 5 years needs to be significantly enhanced to enable orderly development of charging infrastructure to meet the ambitious 60K target by 2030."

Green bonds

Corrado Forcellati, Director, Sustainability Services, KPMG in Singapore:
"Of the three enablers to drive Singapore's sustainability ambition, capital in particular is required to sustain present and future business growth. Singapore is leading the way by issuing green bonds worth $19b on selected infrastructure projects, and I am encouraged to see the Singapore Green Plan 2030 unfolding with the government taking the lead and paving the way with MAS to drive Singapore's Green Finance Action Plan to develop a green economy."

Jobs and Skills Package

Larry Sim, Partner, Tax, KPMG in Singapore:
"As the employment landscape continues to evolve, Singaporeans will need to remain agile, acquiring new skills and talents, and harnessing creativity to improve their employability. The allocation of an additional $5.4 billion to the Jobs and Skills package will surely help in the process of upskilling, in turn developing a stronger Singapore economy."

SINGA

Sharad Somani, Head of Infrastructure, Advisory, KPMG in Singapore:
"SINGA, which will raise bonds of up to S$90 billion to fund significant infrastructure projects such as MRT lines and Coastal and Flood Protection project, is the right approach to spread costs of long term infrastructure to future generation while not compromising the creation of infrastructure projects to keep Singapore competitive and secured. The low interest rate environment will help raise these long terms bonds (20-30 years) at very low coupon rates of around 2-3%. Given the robust pipeline of projects in Singapore and excess liquidity with institutional investors (insurance cost and pedion funds), SINGA will be strongly welcomed by the market. It will also help government resources to be focused on immediate term challenges such as job protection, transforming the economy and strengthening sustainability measures."

PwC

Chris Woo, Tax Leader, PwC Singapore:

"We must help Singapore corporates get ready for the impending change in international taxation. There is anticipation of more tax disputes and controversies as Governments grapple with their revenue base and the situation is compounded by the shock waves of Covid-19. Every government has increased its spending and will need to collect more taxes to fund this. There is a burning platform—a greater need to ensure Singapore gets its correct share or bite from the global tax collection pie.”

Sam Kok Weng, Markets Leader, PwC Singapore:

"Various dimensions covered—COVID resilience, focus on society and community, support for Singapore Green Plan 2030 and some guidance on when GST will increase. For business and employees, the message is clear: secure jobs now and for the future and focus on innovation and productivity for Singapore to 'Emerge Stronger Together'. I can't help but also think this budget is also very aligned to our SG pledge...so as to achieve happiness, prosperity and progress for our nation."

Siew Quan Ng, Asia Pacific Leader, Entrepreneurial and Private Business, PwC Singapore:

“One of the perennial challenges of growth enterprises is manpower constraints. DPM Heng has just announced the extension of certain measures such as the Jobs Support Scheme, Jobs and Skills Package and numerous upskilling opportunities for the Budget to aid businesses and specifically, SMEs to further develop their people. This will bring about some relief and allow promising and fast growth companies and SMEs to innovate, transform and scale.”

Patrick Yeo, Venture Hub Leader, PwC Singapore:

"The Enterprise Financing Scheme – Venture Debt Programme will provide a boost to startups but it will not be adequate as whether or not startups survive and thrive depends on many variables, such as sourcing for talent, market maturity on specific technology adoption, market validation etc. As the startup ecosystem is varied, startups at different stages of their lifecycle will need different types of support. The Venture Debt Programme is for startups which have already validated their products and are seeing high revenue growth. Startups would also need other forms of non-monetary support. Startups would also need support to enter different geographical markets and get local support in those markets. This is where the Global Innovation Alliance will be very useful. In addition, startups would also need tie-ups with institutes of higher learning IHL to continue innovating their products and have access to deep research. We would need to build a vibrant community of angel investors, corporate and accredited investors base who are interested to invest and support the startup community."

Greg Unsworth, Digital Business Leader, PwC Singapore:

“The Emerging Technology Programme is a forward looking one preparing Singapore for the future development and adoption of new and enhanced technologies. With COVID-19 changing the face of remote working permanently, the success in using collaboration and remote working technologies is already encouraging a greater investment by companies in cloud-based infrastructure, 5G and AI applications to enhance productivity and support new business models. This will also increase the importance of developing more comprehensive regulations and standards for safe use of new technologies and, in particular, ethical use of AI.”

Martijn Schouten, People and Organisation Leader, PwC South East Asia Consulting:
"We have seen a large number of initiatives to create jobs over the course of the last 12 months in a wide variety of sectors. There’s definitely an ongoing need for jobs related to technology, technology compliance, data analytics and data science, cyber, robotics etc. As well as roles with humanistic skills such as customer experience, organisation development and agile ways of working. It does require corporates to actively flag and support the ability of workers to upskill and reskill themselves."
 

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