Suggested themes for Budget 2022

Minister for Finance, Mr Lawrence Wong, will deliver Singapore’s FY2022 Budget Statement on Friday, 18 February 2022 in Parliament. 

As Singapore is still working to recover from the pandemic, we wish for short-term reliefs to help business and individuals deal with the immediate challenges, as well as longer-term measures to keep Singapore competitive, based upon the following themes: 

  • Minimal tax regime for international companies
  • Enhance tax regime for certain industry sectors
  • Enhance productivity and innovation
  • Build a caring society
  • Give the local workforce opportunities

Minimal tax regime for international companies

Tax incentives have long been central to Singapore’s strategy of attracting large-scale investments into the country to drive economic growth and job creation. The tax incentives can mean that MNEs end up paying an effective tax rate in Singapore below the global minimum tax rate of 15%.

On 20 December 2021, the Organisation for Economic Cooperation and Development (OECD) released model rules to guide governments around the world with the implementation of a reform to the international tax system. Specifically, these rules define the scope and mechanism of the so-called “Global Anti-Base Erosion” (GloBE) rules under Pillar Two of the BEPS 2.0 project, which will ensure that multinational enterprises (MNEs) are subject to a minimum of 15% effective tax rate from 2023. 

Alignment of the budget to Pillar Two will allow MNEs to rely less on Singapore's Tax incentives, and focus more on the other benefits that Singapore offers, such as strategic location, ease of doing business, rule of law, connectivity to key Asia-Pacific markets and skilled workforce.

Enhance tax regime for certain industry sectors 

Expansion of qualifying activities within Financial Sector Incentive – Standard Tier (FSI-ST) 

The budget can include incentives related to transacting in or providing services relating to digital tokens (including cryptocurrencies), as well as providing services, including as an intermediary, in connection with transactions relating to financial products or instruments, as part of the qualifying activities of the FSI-ST Incentive so as to keep it relevant and attractive.

Enhance productivity and innovation

Cash our R&D benefits - Countries like Australia, Canada, Ireland, New Zealand and the UK allow companies to cash out R&D benefits if they are in a tax-loss situation. This can be done at a cap.

Tax credit on R&D expenses  - Rather than offering an R&D tax deduction as it is right now, Singapore can offer a tax credit for expenses spent on R&D (i.e registering a patent), to allow these expenses to go back towards supplementing more investments in R&D.

Build a caring society

Reliefs for caregivers of disabled family members - Specialised caregivers and nursing aides are increasingly being employed by families to help with caring for aged family members or those with special needs. A special relief can be provided to alleviate on the costs associated with hiring these specialised caregivers and aides, so as to help with defraying the costs in caring for such family members.

Tax relief for health screening - By 2030, 14% of the total population are expected to be 65 years old and above. Coupled with declining population growth rates, it is likely that the burden to care for aged parents with chronic health issues and who need long-term care will be heavier for the next generation. To encourage preventive health care, Singapore can implement a tax relief for medical costs incurred by those, for example, over 50 years old for health screening every other year, with a cap to prevent any abuse of the relief.

Give the local workforce opportunities

Although unemployment has been kept low at between 2-3% in Singapore, these numbers include close to 100,000 who are in the gig economy. Adding people who are working full-time but in stressed-up jobs, full-time in jobs that will no longer exist in a matter of years because of disruption (i.e such as bank tellers) and part-time in roles that offer little career progression, we are looking at more than 10% of the total workforce who are already or can potentially become structurally unemployed. 

To emerge stronger from the COVID-19 crisis, enterprises must provide opportunities to their workforce. It is crucial to put on a people’s lens when building enterprise resilience, with a focus on giving trials and opportunities, tapping onto the gig economy by providing more worthwhile job opportunities that gives workers more chances to utilise their skillsets, networks and experiences in a different context. 

Extension of wage credit schemes like E2i's Professional Conversion Programme to focus more on career changers and returning workers. 


Speak to us about hiring Singaporeans and Singaporean Permenant Residents on wage credits