Budget 2021 should help cushion the economic impact of the Covid-19 pandemic, enhance productivity and innovation, drive workforce transformation and enhance the tax regime, says Ernst & Young Solutions (EY), as it released its wish list for the Singapore Budget on Jan 4.
“Now that the worst of the pandemic looks to be behind us, it’s time to focus on supporting businesses to strengthen and transform for the future, while ensuring that the most impacted individuals and households are given help to rebuild their lives and livelihoods,” says Soh Pui Ming, Singapore head of tax at EY.
“With the significant amount drawn from the reserves last year, it is important that the proposals in Budget 2021 are designed with a long-term, prudent view to help Singapore work towards restoring its finances,” she adds.
Among the proposed measures, EY has suggested that the government include extending the corporate income tax rebate to YA 2021 and increasing the cap to $30,000 from the $15,000 that was applicable to YA 2020.
The firm has also proposed the government to allow tax exemption on allowance or benefits-in-kind provided due to Covid-19, to allow employees to better cope with the pandemic.
“We propose a tax exemption for employees that received allowances or benefits-in-kind from their employers, directly in response to the COVID-19 pandemic. These benefits can include allowances or reimbursement for the purchase of office equipment for use at home,” says Chai Wai Fook, partner, tax services, at EY.
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In addition, EY feels that there are limited direct relief for individuals during the Covid-19 period. Which is why they have suggested that the government include a Covid-19 relief or rebate in Budget 2021.
“As the impact of COVID-19 may continue to be felt in the coming years, an additional rebate or one-off relief for the tax-paying population would be welcomed to help reduce the overall impact to individuals,” says Panneer Selvam, partner at EY, people advisory services – mobility.
The firm has also suggested that the government provide a one-off SkillsFuture Credit top-up of $500 to citizens in the lower income bracket to attend certain pre-qualified digital courses.
In addition, EY has proposed that the government extend the SGUnited Jobs and Skills Package incentive to go beyond 2021.
“The SGUnited Jobs, Skills Package and Enhanced Hiring Incentive can be extended beyond 2021 to provide further incentives for individuals to reskill, upskill and access expanded employment opportunities while encouraging enterprises to hire locals, especially those in mid-careers,” says Goh Jia Yong, partner, people advisory services, at EY.
