Singapore's multinational firms dissatisfied with the Budget 2014: survey

Rising costs, talent shortage top their concerns.

Singapore’s Minister for Finance presented the 2014 Budget Statement on 21 February 2014. Two weeks after the announcement, Deloitte’s post Budget sentiment survey reveals that for the multinational companies (MNCs), 83% of those that responded said that managing rising business cost is a key concern, followed by the need to boost productivity (42%).

When asked if the Budget sufficiently addressed their concerns, none of the MNCs that responded said it did. 42% of the MNCs said that the Budget was neutral to them while more than half (58%) of the MNCs indicated that the initiatives introduced did not address their concerns sufficiently.

In comparison to the SMEs, only 8% of the MNCs indicated that talent shortage is an issue for them. The other top business concerns raised by the MNCs include: Global economic environment (25%) and incentives for investment in innovation (25%).

Low Hwee Chua, Head of Tax Services, Deloitte Singapore & Southeast Asia commented:

While it may seem like there is little offering in this year’s Budget for MNCs, MNCs should consider the measures introduced this year in totality with the existing tax regime. The extension of the PIC, R&D and IPR writing-down allowance schemes relate to broad-based schemes that are available to MNCs as well.

It is also important for the MNCs to note that last year the Government introduced the 3-year transition support package, which is now estimated to be a SGD7.3 billion package, much higher than the originally estimated.

This package includes corporate tax rebate, PIC bonus as well as the wage credit scheme which is a scheme whereby the Government will co-fund 40% of wage increases for Singaporean employees earning a gross monthly wage of $4,000 and below.