The proposal’s framework aims to help the country transform into a smart nation.
Additional grants, incentives, and tax rebates in the 2021 budget will help Singapore become a smart nation and a world-leading supply chain hub whilst improving food security and promoting business transformation, according to KPMG’s Budget 2021 proposal.
In the proposal, KPMG stressed the importance of 5G in Singapore’s transformation into a smart nation. According to KPMG’s partner and head of tax Ajay Kumar Sanganeria, 5G will be a key driver for data consumption and will create demand for innovation in the development of technological platforms.
Sanganeria said there is a need for more government support to fast-track 5G development and adoption on a larger scale. KPMG has proposed a 5G technology and innovation fund that provides 50% of expenditure for prototyping and innovation of 5G enabled solutions and to extend the Market Readiness Assistance grant to provide funding for enterprises to explore solutions in 5G-ready markets.
Aside from 5G, KPMG said the 2021 budget should also include a Digital Transformation Package that will consist of tax incentives to catalyse business transformation by supporting significant capital outlay and the workforce.
Granting a 300% enhanced tax deductions for costs incurred by Singapore companies for the acquisition of a new enterprise resource planning (ERP) system or upgrading of existing systems as well as expanding section 19B of the tax provision to allow writing down allowances on costs incurred on a broader range of intangible assets will help prevent supply chain disruption.
The talent landscape should also focus on these technologies by introducing cloud technologies, AI, data analytics, robotics, and 5G at the secondary education level as well as re-skilling/up-skilling workforce in these technologies.
Special tax rebates for local professionals in qualifying industries critical to Singapore’s economy and ecosystem will also help in the transformation to a smart city.
Job and food security
The pandemic also showed several weaknesses in food supply chains. KPMG’s proposal will encourage urban farming using existing real estate assets whilst maximising current land usage for vertical farming that will create more sustainable sources of protein.
Sanganeria said an enhanced R&D Tax Incentive Scheme that includes extending the list of eligible expenditure to capital expenditure on plant and machinery, utilities, as well as to remove the deemed 60% rule on outsourced R&D expenditure will accelerate innovation in these industries.
Sanganeria added that land intensification allowance should be extended to agri-tech and aqua-tech industries as well as introduce a new incentive for these industries like a tiered concessionary income tax rates of 5/10% that would be subject to conditions such as production capacity and nutrition value of the food produced.
These measures will not only strengthen Singapore’s food supply chain, it will also create additional jobs.
Do you know more about this story? Contact us anonymously through this link.