Singapore's tax system needs to be reformed now, says PwC

There's a need for greater transparency.

Singapore needs to review its tax system in order to remain competitive in the global market, according to a report published by PwC.

With more governments aiming to clamp down Base Erosion and Profit Shifting (BEPS) practices of some multinationals, Singapore needs to review tax incentive schemes which have made the city-state so attractive to global corporations.

"It is necessary to strike a balance between promoting greater transparency and, preserving taxpayers’ confidentiality and Singapore competitiveness. Singapore would benefit from publishing information such as industry summary data about its incentive schemes, the broad requirements for it to apply, the number of taxpayers enjoying the incentives and other relevant economic features," said the report.

Companies which are granted a tax incentive in Singapore should also be subject to higher standards of self-assessment, PwC said.

Other proposed changes include providing tax incentives for local enterprises, raising tax collection to fund welfare programmes, establishing a tax arbitration hub, agreeing on transfer pricing safe harbour rates with other tax authorities, and expanding Singapore's tax treaty network.

“In light of the changing global tax environment and Singapore’s evolving position as a value-creating economy, it is an opportune time to review our current tax policy to solidify our position as an attractive and substantive location of business. This will also help to cater to the growing need for increased government revenue to fund more social and welfare programmes," said Chris Woo, Tax Leader, PwC Singapore.