(Bloomberg) — Singapore remains competitive despite higher taxes unveiled at Monday’s budget as it doesn’t compete on cost alone but on value, the country’s Minister for Trade and Industry S. Iswaran said.
“When you take into account the whole scheme of taxes, including corporate tax regimes, personal tax regimes, I think Singapore still remains a competitive destination in relative terms,” Iswaran said in a Tuesday interview on Bloomberg Television.
Singapore’s budget focused on tax increases to help boost revenue that has become more dependent in recent years on reserves to finance spending. The goods-and-services tax is set to be increased by 2 percentage points from as early as 2021, while property levies were hiked. At the same time, the government gave Singaporeans a one-time cash handout to celebrate the bigger-than-expected 2017 fiscal surplus.
Businesses face a fresh carbon tax and weren’t given much guidance on how the government will manage foreign-worker restrictions that have weighed on hiring decisions. But they, too, had some wins, including an extension of the corporate income tax rebate and more support for research and development projects.
The move to hike stamp duty on some residential property purchases was not about cooling the real estate market per se but more about ensuring “greater progressivity” and an equitable tax structure in Singapore, Iswaran said.