Updated February 19th, 2024 at 17:39 IST

Singapore announces tax adjustments and economic support measures

The key announcement was the adoption of the 15 per cent global minimum corporate tax rate proposed by OCED.

Reported by: Business Desk
Singapore announces tax adjustments and economic support measures | Image:Unsplash
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Singapore's tax adjustments: Singapore's Finance Minister, Lawrence Wong, unveiled a series of significant changes to the country's tax system and economic strategy in response to global developments and local needs.

The key announcement was the adoption of the 15 per cent global minimum corporate tax rate proposed by the Organisation for Economic Cooperation and Development (OECD). This move aims to align Singapore with international standards and prevent the erosion of its tax base.

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Wong acknowledged that this adjustment might lead to a reduction in the tax base as multinational companies reassess their plans. However, he emphasised that Singapore's focus remains on ensuring a strong, innovative, and vibrant economy. The government expects no immediate revenue gains from this tax adjustment.

Increased spending 

In addition to the tax changes, Wong announced expanded government spending to help households cope with inflationary pressures and to stimulate economic growth and job creation. This includes a surplus of S$0.8 billion for fiscal year 2024 and additional support packages for households and companies, totaling S$1.9 billion and S$1.3 billion, respectively.

To address the challenges of an ageing population and to promote economic transformation, Wong outlined plans to increase healthcare support and invest in research and development (R&D) and artificial intelligence (AI). The government also aims to boost GDP growth to 2 per cent to 3 per cent annually over the next decade by focusing on productivity and innovation.

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These measures are part of Singapore's broader strategy to maintain its competitiveness and ensure sustainable growth amid evolving global economic trends. The government remains committed to responsible economic management and balancing the needs of its citizens with the demands of a rapidly changing world.

(with Reuters inputs)

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Published February 19th, 2024 at 17:39 IST