Mr Saktiandi Supaat: To ask the Minister for Trade and Industry with regard to the latest G7 agreement on a global minimum corporate tax rate of 15% (a) how will this potentially impact our efforts (including the use in part of corporate tax incentives) to attract MNCs; (b) what are the fiscal and foreign investment implications for Singapore; (c) which sectors of our economy will be principally affected; and (d) what strategies will the Ministry take to find new growth industries and hubs in this new global tax environment.
Oral Answer (to be attributed to Minister for Trade and Industry Mr Gan Kim Yong)
1. Last week, 130 countries and jurisdictions, including Singapore, agreed to reform international taxation rules under the Base Erosion and Profit Shifting (or BEPS) 2.0 Project. Details on the final parameters, design and implementation will need to be discussed in the coming months. Therefore, there remains significant uncertainty in terms of the possible impact on Singapore, and the sectors which will be most affected.
2. When the details have been finalised, all jurisdictions will need to adjust their tax regimes to be compliant with the new rules, or cede tax revenue to other jurisdictions. We are closely monitoring developments and have been engaging industry stakeholders to understand their needs so that we can better formulate our response. Any adjustments to Singapore’s tax system will aim to minimise the compliance burden for businesses and ensure that Singapore continues to be an attractive place for business.
3. Singapore’s competitiveness goes beyond our taxation rates. Our key fundamentals such as our strategic location and international connectivity, excellent infrastructure, rule of law and skilled workforce remain strong. We must not be complacent. Therefore, we are redoubling our efforts to enhance our competitiveness and improve our business environment, for example through updating our Industry Transformation Maps (ITM). We are therefore confident that investors will continue to find Singapore a compelling place to do business, and our economy can continue to thrive in the new operating environment.