The Big 4’s Budget 2024 wishlist: Did Singapore deliver?

Deloitte, EY, KPMG, and PwC shared their reactions.

Experts and business leaders shared their various recommendations as to what they want Singapore’s Budget 2024 to focus on and for the world’s biggest accounting firms this means strengthening the tax regime, developing the workforce, and supporting businesses that would lead to Singapore solidifying its stance as a global innovation hub.

Finance Minister Lawrence Wong delivered the Budget 2024 speech which is the ‘first instalment of the plans set out in the ForwardSG roadmap.’

“We aim to give more assurance to help more Singaporeans navigate the uncertainties in today’s world,” Wong said during the Budget speech on 16 February.

As technology has become an important part of being globally competitive, Singapore has earmarked $1b to invest in AI-related development from talent and focusing on partnering with top firms to build AI centres.

Under the plan, the city-state aims to boost its local AI talent pool, secure access to chips crucial for AI tasks, and partner with leading companies to build AI centers.

The government will also introduce a new SkillsFuture Level-Up programme for mid-career workers. The government will give subsidies to Singaporeans aged 40 and above who plan to pursue another diploma from AY 2025 onwards at Polytechnics, ITE, and Art institutions.

Singapore has also allotted $1.3b for an Enterprise Support Package for local companies. These include a $2,000 cash payout and a 50% income tax rebate of up to $40,000 whilst also ensuring that Singaporeans are supported with various cost-of-living increase assistance.

Here’s what some of the leaders of the Big 4 have to say about all of this and other items on the agenda on the Singapore Budget 2024 speech.

DELOITTE

Daniel Ho, Tax & Legal Leader, Deloitte Singapore:

“Deputy Prime Minister and Finance Minister Lawrence Wong presented a strong first instalment of the Forward Singapore programmes that launches the nation on a trajectory towards building a shared future together for a better Singapore. The Singapore Budget 2024’s focus on providing opportunities and assurance across all stakeholders – businesses, workers, community groups, families and individuals – sends a firm message on the Government’s commitment towards pursuing sustainable growth, maintaining an innovative and vibrant economy and safeguarding what makes Singapore resilient. It is indeed a collective responsibility that forges a stronger, more united nation.”

Sharon Tan, Tax Partner, Deloitte Singapore:

"The Budget 2024 is comprehensive and thoughtful in making sure that every sector of the community, and business needs and challenges have been covered. It will be interesting to see the details and how the various plans will be executed. It was mentioned that we need to respond to the competitive landscape especially to attract investments into Singapore. It will therefore be interesting to see how our incentive programmes differentiate Singapore from other jurisdictions especially that it is now announced that Singapore will implement IIR and DTT in 2025 with UTPR deferred."

Yap Hsien Yew, Tax Partner, Deloitte Singapore:

“I am very heartened by the government’s commitment to support workers and businesses in this uncertain environment. In particular, the $4,000 SkillsFuture credit top-up for mid-career workers shows foresight in continuing investment in human capital development. As Deputy Prime Minister Lawrence Wong highlighted, technological advances mean expertise is in constant flux, so we must help workers refresh and update their skills. The budget also demonstrates care for lower income families, with enhanced workfare payouts, CDC voucher top-ups, and rebates to ease household expenses. As the saying goes, “when the wind of change blows, some build walls while others build windmills”. Budget 2024 puts Singapore in a good position to build windmills and transition smoothly to the future.”

Yvaine Gan, Global Investment & Innovation Incentives Leader, Deloitte Singapore:

“The new Refundable Investment Credit (RIC), a tax credit with a refundable cash feature, has been highly anticipated and will be welcomed by both potential investors and existing multinationals in Singapore impacted by BEPS Pillar Two. It is encouraging to see that the Singapore government has incorporated industry feedback and designed this new incentive tool with flexibility to support a wide range of activities, including manufacturing, digital services, headquarter activities, commodity trading, R&D and green transition plans.”

“Whilst the new RIC seems to be expenditure-based, where the quantum of credits will depend on pre-determined support rates on qualifying expenditure, we hope to see the RIC expanded to include output/volume-based features, such as a company’s volume of products manufactured in Singapore. This greater flexibility of having a combination of expenditure-based and output-based credits will address the needs of a broader range of businesses, making the RIC an even more impactful incentive in supporting companies in the changing investment landscape.”

Liew Li Mei, International Tax Leader, Deloitte Singapore:

“Artificial Intelligence is not just about ChatGPT or large language models, it can be used for a greater general purpose. Wonderful to see Singapore topping up $1 billion over the next 5 years to support the National Artificial Intelligence Strategy 2.0. This would encourage companies to set up AI Centres of Excellence, build specialised AI talent pipelines, spur industry collaborations, leading to greater value creation in Singapore.”

EY

Liew Nam Soon, Singapore Country Managing Partner and EY Asean Regional Managing Partner, Ernst & Young Solutions LLP:

“Budget 2024 is thoughtfully calibrated, incisive and inclusive, drawing from the pillars of Forward Singapore. The measures alleviate immediate business pressures while levelling up Singapore’s long-term competitiveness through investments in sustainability and AI as levers for growth and transformation. A strong social compact is essential to enduring the winds of change. At the core of this year’s Budget is an utmost care for people – from upskilling workforce, enhancing livelihoods and improving quality of life.”

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

“We expect the Refundable Investment Credit (RIC) to be a critical enabler in helping Singapore to attract investments from global companies, including R&D activities, thereby anchoring high-value activities and capabilities. This will complement existing R&D and innovation pillars and propel Singapore’s ambition as a global R&D hub. At the same time, the new tax credit will spur investments by businesses in high value and substantive economic activities such as new productive capacity in manufacturing plants, expanding or establishing the scope of activities in digital services and establishing headquarter activities in Singapore.

Praveen Tekchandani, Singapore Climate Change and Sustainability Services Leader at Ernst & Young LLP:

"Singapore has committed to tackling the enormity and complexity of decarbonizing its energy supply by taking decisive action and adopting a multi-pronged approach. The proposed S$5b Future Energy Fund supports businesses in adopting transformative technologies like hydrogen and ammonia, alongside the continued development of low-carbon energy sources. Together, these initiatives pave the way towards a cleaner, more resilient energy future for Singapore.”

Panneer Selvam, EY Asean People Advisory Services Tax Leader:

“The $1.9b boost to the Assurance Package, with its mix of cash, vouchers and rebates, displays the government’s clear support for the lower- and middle-income, and multigenerational households to manage the rising cost of living and uncertain economic outlook. While temporary, these measures ultimately strive to foster collective progress for all Singaporeans, strengthening Singapore’s social compact and ensuring that no one is left behind.”

Kerrie Chang, Partner, People Advisory Services Tax, Ernst & Young Solutions LLP:

“Ensuring a comfortable retirement for our ageing population remains a focal point in Budget 2024. This is visible in the planned 1.5% increase in CPF contribution rates for those between 55 and 65 years of age in 2025. The extension of the CPF Transition Offset further exemplifies our strategic approach by effectively managing potential business cost increases. These actions create harmony between supporting our ageing society and navigating economic shifts.”

KPMG

Harvey Koenig, Partner, Telecommunications, Media & Technology, Tax, KPMG in Singapore:

“Singapore's newly introduced Refundable Investment Credit serves as a strategic solution to the challenges faced by multinational enterprises due to the global minimum tax rate of 15 percent. This will enable Singapore to remain competitive amidst global competition for investments. Whilst we await details of the Refundable Investment Credit scheme, it is expected that the scheme will be designed to meet the requirements of a Qualified Refundable Tax Credit scheme under the BEPS 2.0 Pillar Two rules. This provides for a more favourable treatment of such tax credit schemes compared to other forms of tax incentives, which will help mitigate the impact under the Pillar Two rules that many multinational groups have been very concerned with.”

Ajay Kumar Sanganeria, Partner & Head of Tax, KPMG in Singapore:

“The announcement of a 50% corporate income tax reflects the government's acute commitment to enterprises in the current economic landscape. The decision to set the rebate cap at $40,000 - the highest in a decade - and minimum cash payout of $2,000 further emphasises this commitment to bolstering smaller businesses.”
    
Catherine Light, Partner, Tax Reimagined, KPMG in Singapore: 

“Personally, I am excited about the AI Centres of Excellence that will drive collaboration and innovation, which will set Singapore apart amidst an increasingly competitive business landscape. This focus will support organisations to truly harness the benefits of existing talent within Singapore, supported by leading-edge AI capabilities, driving value to the business and creating new opportunities for growth.”

Sharad Somani, Partner and Head of KPMG ESG, KPMG in Singapore:

“The decarbonisation of the energy sector gets a big leg up with creation of the $5b Future Energy Fund. By channelling this fund to strengthen critical energy infrastructure for clean carbon solutions such as geo-thermal, small modular nuclear and imported renewable energy, we are preparing ourselves to transition away from a fossil fuel based economy to a low carbon future. This bodes well for companies focussed on clean energy solutions and can help catalyse a new eco-system in the coming years.”

See Wei Hwa, Partner, Tax, KPMG in Singapore:

“The government’s commitment to invest $1Bn over the next five years to catalyse artificial intelligence (AI) activities will help boost Singapore’s regional leadership in driving innovation, particularly through the setting up of AI centres of excellence in Singapore by leading companies. In this regard, the Refundable Investment Credit scheme announced in Budget 2024 is timely and synergises well with the setting up of these AI centres of excellence, to ensure that Singapore remain attractive as an investment destination for these multinational enterprises, even with the introduction of the minimum 15% corporate income tax rate under the BEPS Pillar Two rules.”

PWC

Lennon Lee, Financial Services Tax Leader, PwC Singapore:

“Whilst the 50% corporate income tax rebate capped at $40,000 is great for profitable companies, I applaud the Singapore Government for not forgetting to support SMEs which may not benefit from the tax rebate by giving a cash payout for companies that employ at least one local employee in 2023.”

Irene Tai, Energy, Utilities and Resources, Transport and Logistics Tax Leader, PwC Singapore:

“Countries such as the U.S. currently offer attractive investment tax credits for green transition projects and sustainable investments. The introduction of Refundable Investment Credits (RIC) should help to improve Singapore’s competitiveness for sustainability investments and pivot more MNEs investment dollars toward Singapore.” 

Lim Kexin, Partner specialising in Entrepreneurial and Private Business Tax, PwC Singapore:

“Whilst the world is still deliberating how to best navigate the opportunities and risks of AI, the Government’s decisive move under the National AI Strategy 2.0 to increase an additional $1b investment for critical advanced AI chips and quickly anchor a community of AI centres of excellence, in addition to its previously announced ambition of tripling Singapore-based AI practitioners, is especially laudable. It is bold and holistic moves like these, which will put Singapore ahead in the new economy and provide a further boost for our next phase of economic growth.”

Lim Maan Huey, Asset Wealth Management and Real Estate Tax Leader, PwC Singapore:

“The success of the VCC regime has been supported by funding from the Financial Sector Development Fund (FSDF). With the $2b top up to the FSDF, this will provide Singapore with further capacity to support talent development, innovation and development in the financial services sector. I am excited to see what new initiatives would be rolled out by the MAS with the new funding to sustain and grow Singapore’s position as a leading hub for fund management activities.“

Chris Woo (Mr), Asia Pacific and Singapore Tax Leader, PwC Singapore:

“The new $4,000 Skills Future Credit is the proverbial good seed that DPM is planting to enhance Singapore’s workforce ecosystem. Changes (in our jobs) is the new constant. The upgraded scheme encourages more senior workers to upgrade and keep their skills ahead of the job curve. It has been said: “Give a man a fish and you feed him for a day. Teach him how to fish and you feed him for a lifetime”. The 2024 Budget is focused not only on teaching Singaporeans how to fish, but also how to farm fish to increase production and bring the fish to market."