SINGAPORE: Singapore's Minister for Finance Lawrence Wong today tabled a national budget aimed at building the republic’s capabilities and seize new opportunities in a new era of global development.
Wong said the budget this year is part of a broader exercise to chart Singapore's new way forward together and is centered on three key thrusts to secure the future in a new era.
Under the first key thrust of “growing its economy and equipping its workers”, Wong said Singapore will redouble its efforts to attract high-quality investments.
“We will focus on growth sectors where we can be highly competitive,” he said when delivering the Budget Statement themed “Moving Forward in a New Era”, at Parliament here.
He said that not only is Singapore a leading international financial centre in Asia, the republic is also a global trading hub with strengths in transportation and logistics, anchored by air and sea ports.
“We also have a vibrant manufacturing sector, supported by key segments like electronics, chemicals, and biomedical science.
“These attributes and strengths will enable us to attract more multinational enterprises (MNEs) to anchor their regional or even their global operations and headquarters in Singapore,” he said.
With more high-value activities and best-in-class facilities based here, Wong said Singapore will able to build new capabilities, develop key industries, and create good jobs for the locals.
The other two key thrusts to secure the future in a new area are “strengthening social impact and building a resilient nation.”
For the financial year 2023 (FY2023), the republic expects an overall slight deficit of S$0.4 billion (S$1=RM3.27) or 0.1 per cent of its Gross Domestic Product (GDP).
Touching on the overall deficit for FY2023, Wong said “this is appropriate for the projected economic conditions this year.
“Nonetheless, we will have drawer plans in place to take swift action, should the downside economic scenarios materialise,” he said.
In an annex released to the media, the operating revenue for 2023 is estimated at S$96.70 billion as against the estimated total expenditure of S$104.15 billion.
On corporate tax, Wong said that the republic’s corporate tax system will be affected by Base Erosion and Profit Shifting (BEPS) 2.0 Pillar 2 where a global minimum effective tax rate of 15 per cent for large MNE groups will be introduced.
“Some key parameters of Pillar 2 have only been finalised this year while others remain under discussion at the international level,” he said, adding that as the rules will be implemented progressively, the full effects will only be felt in 2025 or later.
Given this development, Wong said the ministry intended to implement Pillar 2 from 2025, as part of the broader international move to align minimum global corporate tax rates for large MNE groups.
“When we do so, we will implement a Domestic Top-up Tax, which will top up the MNE group’s effective tax rate in Singapore to 15 per cent,” he said.
Elsewhere, the finance minister also announced further adjustments to the republic’s tax system involving, among others, Buyer’s Stamp Duty, or BSD regime, which applies to all purchases or receipt of gifts of immovable properties in Singapore.
As for other taxes, Wong said that to discourage the consumption of tobacco products, the ministry will implement a 15 per cent increase in tobacco excise duty across all tobacco products with effect from today.
“The increase is expected to generate about S$100 million in additional revenue per year,” he said. -Bernama