Written reply to PQ on effectiveness of tax incentives provided to foreign companies on job creation and wage enhancement in past five years

Question:

Assoc Prof Jamus Jerome Lim: To ask the Deputy Prime Minister and Minister for Trade and Industry (a) what is the quantum of tax incentives provided to foreign companies in the past five years; (b) what methodology is used to calculate return on investment of the incentives with regard to job creation and wage enhancement; (c) what is the cost per Singaporean job created through tax incentives versus other schemes; and (d) whether cost effectiveness reviews are performed on alternative approaches. 

Written Answer by Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong

1.                  The value of incentives awarded is a fraction of the projected total value of the investment, and incentive recipients are required to achieve economic outcomes, such as job creation, local employment, business spending, or fixed asset investment. For example, the Economic Development Board’s investment commitments in 2025 are expected to create 15,700 new jobs when realised over the next five years, with about two-thirds paying a gross monthly wage above $5,000. Majority of these jobs are expected to go to locals. 

2.                  The Government adopts a multi-pronged approach to create good jobs for Singaporeans. In addition to incentives to anchor foreign investments, we have various enterprise development grants to support local companies to transform, grow their business, and move into higher-value activities. When companies become more productive and competitive, they will be better able to create quality jobs and pay higher wages.