KPMG allocates $1b to green initiatives

Along with this, the group recommends a green financing bank.

KPMG’s proposal for the 2022 Singapore budget included environmental, social, and governance (ESG) provisions, global taxes, and support for enterprises. 

“Budget 2022 will need to address several upcoming challenges. Climate change has become a top priority for countries and companies; the impending global tax could affect multinational corporations' decision to locate in Singapore, while supply chain concerns and border restrictions will still be top of mind," said Ajay Kumar Sanganeria, partner, head of Tax, KPMG in Singapore.

To aid the ESG agenda, measures against greenwashing were recommended by the group. 

Focusing on strengthening investment in sustainable infrastructure projects were also recommended by the proposal, with KPMG suggesting the set-up of a green financing bank for the region. The Singapore Exchange was also highlighted as another catalyst to speed up the attraction of green bonds. 

Other measures highlighted by the agenda include investment in alternative energy sources and the encouragement of landlords towards green buildings. Included in the perks for landlords are exemptions on taxable gains, GST rebates on imported green-related equipment and raw materials, an extension of the Building Retrofit Energy Efficiency and a 200% tax allowance. 

On the side of global tax, meanwhile, refundable tax credits were one of the measures supported by KPMG. This would replace the existing tax deductions scheme with a refundable tax credits scheme, allowing for the cushioning of global tax rules.

Enhancements in incentives for Regional HQs for MNCs and packages for companies were also stated as potential ways to aid tax opportunities. This includes concessionary tax rates of 10% for qualified income, grants to anchor research and development (R&D) activities in Singapore, and enhanced tax deductions for R&D performed outside Singapore.

To know more about the proposal, the entire paper can be found here.