Startups should be at the core of Budget 2016, says Deloitte

They need more support and incentives.

Budget 2016 should focus closely on innovation-led enterprises like start-ups, according to Deloitte Singapore's recommendations for this year's budget.

Deloitte noted that the focus on building new business capabilities and value-creation is ever more important for Singapore, particularly as economic growth is expected to slow this year while middle and back office jobs in the country are under threat from lower cost locations.

“As start-ups may not be profitable in the initial years, but instead would likely require funding, Deloitte Singapore suggests fine-tuning certain schemes to incentivise start-up investors, allow the continuation of tax losses incurred by start-ups and enhance the loss carry-back regime,” said Low Hwee Chua, Partner and Head of Tax Services at Deloitte Singapore and Southeast Asia.

Deloitte stressed that Budget 2016 should introduce fiscal policies which will encourage a culture of innovation and further promote start-ups in Singapore.

“On the technology front, we are proposing tax incentives to support businesses in digitisation and automation of their businesses, such as granting enhanced tax deductions for evolutionary innovative activities that strictly may not be considered as R&D, consultancy fees incurred for digitisation projects, and software development activities,” Low said.