Why KPMG thinks tax tweaking must be done in a 'calibrated way'

And why labour-intensive industries must not be ignored.

KPMG recently released its reaction on the Singapore Budget 2013.

Chiu Wu Hong, Partner, Tax, KPMG in Singapore said, "Tweaks to the existing tax structures have made them more progressive, but this has to be done in a calibrated way to benefit more Singaporeans. In intensifying Singapore's efforts to improve sustained productivity growth while tightening foreign workforce growth, care must be taken to ensure that labour-intensive industries are not neglected. Such industries need time to restructure their business models and undergo transitions to productivity-driven models."

Here's more from KPMG:

Since 2010, the Singapore Government has taken steps to transform the economy to create better jobs, and to allow for a better pace and quality of life for Singaporeans. Since last year, it has also made important shifts in social policies to foster a fair and more inclusive society.

In many ways, this year's Budget is a continuation of the process to transform the economy to create a better Singapore through quality growth and an inclusive society.

The issue of foreign workers, which was put in greater spotlight after the release of the Population White Paper, was one of the key issues addressed by Deputy Prime Minister and Finance Minister, Mr Tharman Shanmugaratnam.

He said the flow of foreign workers cannot be cut off abruptly, but added that the growth has to be further moderated.

Hence, there are more restrictions imposed on foreign labour, seemingly calibrated to the circumstances of particular sectors and different categories of workers.

To read KPMG's full analysis on the Singapore Budget, click here.