This week, Parliament in Singapore passed an amendment to the Economic Expansion Incentives Act, which will extend the maximum potential tax relief period for companies if they base their long-term operations in Singapore, which will effectively increase incentives for more direct foreign investment into the economy.
Singapore can build up new industries and create good jobs for Singaporeans by attracting foreign companies to set up fundamental business operations here, stated the Minister for Trade & Industry Mr Lim Hng Kiang.
The amended act also confirms that as per the Development & Expansion Incentive scheme, the maximum tax relief period of 20 years under applies to activities within a company that qualify it for the scheme, rather than to the company as a whole.
Mr Lim noted: ‘A company can be awarded multiple Pioneer Certificates when it anchors different qualifying economic activities in Singapore over a period of time.’ He added that companies in Singapore currently enjoy a limited period of 15 years tax relief regardless of the qualifying activities. By lengthening this period, this will encourage SMEs engaged in high value manufacturing or service related activities to continue to expand in Singapore.
‘The scheme will require businesses to commit to contributions on a larger scale which is therefore quite natural that only bigger companies would qualify’ he said, remarking that there are alternative schemes to support local firms’ growth.