Tax measures needed to help businesses adapt: Deloitte
This is in order to attract businesses despite the decline in economic activity.
Tax measures are the way forward in order to aid businesses, according to a list of proposals released by Deloitte.
“Budget 2021 provided much relief to businesses, and whilst we recognise that the level of support cannot be sustained indefinitely, certain businesses, particularly small and medium-sized businesses, are still struggling despite the improved outlook and may require additional assistance to get through this challenging time,” said Low Hwee Chua, Tax & Legal Leader, Deloitte Singapore and Regional Managing Partner for Tax & Legal at Deloitte Southeast Asia.
The retainment of the country’s tax incentive framework, Deloitte said, is to continue attracting new investors and allow for the review of current tax incentives. This is in lieu of the impending implementation of the Global Anti-Base Erosion rules, which is part of BEPS 2.0 initiatives aimed at making sure multinational enterprises pay tax wherever they operate.
Proposals made by Deloitte also cover deduction of medical expenses, adjusting the requirement for claiming of mergers and acquisition (M&A) allowance and strengthening the innovation and IP ecosystems.
In terms of deduction of medical expenses, Deloitte proposes that the cost for COVID testing be fully deductible for tax purposes, rather than being subject to the medical expense restriction. Currently, the deduction of medical expenses incurred by an employer is restricted to 1% of total employee remuneration.
The company also proposes removing the requirement for M&A consideration to be fully paid up within six months from the date of share acquisition. Deloitte argues that claiming M&A allowance may be too difficult to meet for others.