I thank Mr Kong Pih Shu and Mr Woon Wee Min for their letters “Have tax incentives for MNCs paid off?” (April 29) and “Tax breaks for MNCs pay off in many ways” (May 2).
Singapore has developed a vibrant and diversified corporate ecosystem that grows our economy and creates good jobs for Singaporeans. Multinational companies (MNCs) play a significant role in our economic development.
Last year, MNCs committed S$11.8 billion in fixed asset investments and S$7 billion in annual business expenditure. These investments are expected to create 16,100 skilled jobs. MNCs also helped to anchor and grow key new sectors, such as clean technology.
Our small and medium enterprises (SMEs), too, have benefitted as suppliers and subcontractors to MNCs. The Economic Development Board’s Partnerships for Capability Transformation scheme has also helped MNCs to transfer technological capabilities to SMEs.
As in many other countries, tax incentives support Singapore’s economic growth and promote investment. The incentives are granted to companies with substantive economic activities here, which will add value significantly to our economy and create employment.
Incentive recipients are subject to audits to ensure commitments are met, and programmes are reviewed regularly. Besides tax incentives, MNCs are attracted by Singapore’s strategic location, strong connectivity, trusted legal and regulatory framework, and talent pool.
While MNCs play an important role in our economy, the Government remains committed to supporting our SMEs. Last year, Spring Singapore assisted more than 9,000 SMEs through some 12,000 upgrading projects to boost productivity and competitiveness and capture growth opportunities.
Together with its partners, Spring also reached out to some 160,000 SMEs last year with other forms of assistance such as business advisory services and toolkits. Similarly, International Enterprise Singapore helped 22,400 SMEs in their overseas expansion last year.
We will continue to work with industry partners to create an environment conducive to doing business for both SMEs and MNCs.
Mrs Cindy Keng
Director, Corporate Communications Division
Ministry of Trade and Industry