Strategic TransformationThe Way Forward Singapore Budget 2018

2 Budget Commentary 2018

3Budget Commentary 2018

Infrastructure Office• Bringstogetherlocalandinternationalfirms fromacrossthevaluechain

• Enables infrastructure players to better tap on opportunities

Enhanced tax deductions for the use and development of innovation• FromYA2019toYA2025• IPlicensingpaymentstounrelatedparties:

increase to 200%, capped at $100,000• IPregistrationfees:increaseto200%, capped at

$100,000• Qualifying expenses incurred onlocalR&Dactivities: increase to 250%

Overview•EstimatedFY2018overallbudgetdeficitof$0.6 billion (0.1% of GDP) • $80 billionexpectedexpenditure(8.3%higherthaninFY2017)

Enhance and extend CIT rebate • 40% of tax payable, capped at $15,000 forYA2018;and20% of tax payable, capped at $10,000forYA2019

Stamp Duty• TopmarginalBuyer’sStamp

Duty rate increased to 4%, and appliedonthevalueofresidentialpropertiesabove$1 million

Productivity Solutions Grant • Funding support of up to 70%

for adoption of pre-scoped, off-the-shelf technologies

Wage Credit Scheme (WCS)• ExtendtheWCSforthreemoreyears

• Provide20% co-funding for 2018, 15%for2019and10% for 2020

Enterprise Development Grant (EDG) • Funding support for building

capabilities and internationalisation• Launching in Q4 2018

SG Bonus• AlladultSingaporeanswillreceive

one-off bonus of up to $300

%

Excise Duty• 10% increase in tobacco excise duty effectivefrom19February2018

GST • IntroduceGSTonimportedservices forcertainbusinesseswitheffect from1January2020

• Overseasvendorswhichmadesignificantsupplies ofdigitalserviceshavetoregisterforGSTwitheffectfrom1January2020

• GST to go up to 9%,sometimebetween2021to2025

Carbon tax • Imposeonfacilitiesproducing25,000 tonnesormoreofgreenhousegas emissionsayear

• $5pertonneofgreenhousegasemissions from2019to2023

• Firstpaymentin2020basedonemissionsin2019• U-Saverebateswilloffsettheimpacttohouseholds

At a glance: Singapore Budget 2018

4 Budget Commentary 2018

Budget2018isaboutbuildingthefutureofSingaporefroma position of strength. Riding on the upturn of the global economy,Singapore’sGrossDomesticProduct(GDP)expandedby3.6%in2017.Productivitygrowthwasatitshighestsince2010,andthecountryachievedastrongfiscalfooting.Thatbeingsaid,withthethreemajorshiftsinthenextdecade(theshiftineconomicweighttoAsia,disruptionfromtechnologiesandageing),Singaporehas to anticipate the challenges ahead.

JustasthepastBudgetshavelaidthefoundationfortoday’ssuccess,FinanceMinisterHengSweeKeathas,throughBudget2018,setthewheelsinmotiontoprepareSingapore for challenges of the next decade and beyond. IntheleaduptoBudget2018,theGovernmenthademphasisedtheexpectedincreaseinspendingneeds,suchas on healthcare, infrastructure and security, and the need tohavesustainablerevenuestreamstofundtheseexpenditures.MostofthetaxchangesannouncedwereforewarnedinearlierBudgetstatementsorthroughvariousspeechesbyGovernmentleaders.Assuch,theintroductionofGoodsandServicesTax(GST)onimportedservicesfrom1January2020andacarbontaxfrom2020didnotcomeasasurprise.ThemuchtalkedaboutpossibleGSTratehike,however,didnotmaterialise.Instead,theFinanceMinistergaveampleadvancenoticethattheratewillbeincreasedto9%,sometimebetween2021and2025,dependingonthestateoftheeconomy,alongwithappropriateoffsetmeasurestoprovidehelptotheneedy.Suchastrategyseemsappropriatetopreparebothbusinessesandthepersononthestreetforsomethingthatseemsneeded.

Oneothersurpriseisthenewtopmarginalbuyer’sstampdutyrateof4%,applicableonthevalueofresidentialpropertiesthatexceed$1million.ThischangeisanothersteptakentoimprovetheprogressivityofSingapore’staxsystem.Itisalsoconsistentwiththetweakstothepropertytaxandpersonalincometaxregimesmadeinrecentyears,wherethemorewealthyareexpectedtobearahigherincidence of taxes.

Inthelongrun,sustainablesourcesofrevenuescanonlycomefromhavingagrowingandrobusteconomy.Recognisingthis,amajorprongofBudget2018isdevotedtobuildingavibrantandinnovativeeconomy,centredonpromotinginnovation,buildingcapabilitiesandforgingpartnerships locally and abroad, as enablers for the initiativesundertheIndustryTransformationMaps(ITMs).Tohelpfirmsinnovate,theFinanceMinisterhas,amongotherthings,streamlinedexistinggrantsforadoptionof

Budget 2018 – Setting the wheels in motion %

Yeoh Oon Jin

Chris Woo

5Budget Commentary 2018

off-the-shelftechnologiesintotheProductivitySolutionsGrant,aswellasintroducedenhancedtaxdeductionsforlicensingpaymentsandqualifyingresearchanddevelopment(R&D)expenses.Thesetaxmeasuresareparticularlytimely,giventheintensecompetitionforR&DinvestmentsgloballyandalsowiththelapseoftheProductivityandInnovationCredit(PIC)scheme.Togetherwithotherprogrammestoharnesseffortsforgreateradoptionofautomationandrobotics,builddigitalcapabilitiesthroughTechSkillsAccelerator,andtaponthepotentialfordevelopmentintheregionthroughtheestablishmentofanInfrastructureOffice,thesemeasuresshould help position Singapore as a regional and global businesshubasittransformsintoaknowledgeintensivesocietywithanITenabledworkforce.

TheFinanceMinisterhastunedthehelpgiventosmalleryoungercompanies.WhileadjustmentsweremadetotheStart-UpTaxExemptionandthePartialTaxExemptionschemestoreducetheamountofincomeexcludedfromtax,theFinanceMinisterhasalsoenhancedthecorporateincometaxrebatefortheyearofassessment(YA)2018andextendedittotheYA2019,tohelpmitigatesomeoftheimpact.Whatisnoteworthyisthehelpextendedtothosemakingaprofit.

ItisverymuchareflectionofthematurityofSingapore’staxregimethatwehavenotseenmanymajortaxincentivesbeingintroducedintherecentpast.Itisnotanydifferentthisyear.Anumberoftaxconcessionswhichremainrelevanttothefinancialsectorhavebeenrenewedand rationalised, and the Singapore-listed Real Estate InvestmentTrust(S-REIT)industryreceivedaboostwith

tax transparency being extended to Exchange-Traded Funds(ETFs)investinginS-REITs.Thatbeingsaid, theassetmanagementindustryshouldwelcometheintroductionofataxframeworkforSingaporeVariableCapitalCompanies(S-VACCs),underwhichexistingfundmanagementtaxconcessionswillbeextendedtoS-VACCs,alongwithconfirmationthatanS-VACCwillbetreatedasasingleentityfortaxationandneedonlyfileonetaxreturn.ThelaunchofthisnewfundstructureshouldfurtherstrengthenSingapore’spositionasahubforfundmanagementanddomiciliation.

Whenallissaidanddonethough,onedoesnotgrowaneconomyforthesakeofit;economicgrowthismerelyameanstoanend–thatofprovidingpeoplewithabetterqualityoflife.AkeythrustintheBudgetisthusonbuildingacaringandcohesivesociety,andforthat,theMinisterannouncedvariousinitiativestosupporteducation,lookaftertheageing,aswellasmeasurestosupportfamilies.Ashehimselfnoted,theBudgetisastrategicandintegrated plan to position Singapore for the future. It is laudablethatheistakingadvantageoftheeconomicupturn to plan for the future, so as to strengthen Singapore’seconomicinfrastructureandsocialcapital.

Chris WooTax Leader PwCSingapore

Yourssincerely,

Yeoh Oon JinExecutiveChairman PwCSingapore

6 Budget Commentary 2018

Reactions to the Budget

Raising the GST rate to 9 per cent still puts us below the regional

average of 10.5 per cent and the OECD average rate of 19 per cent

which suggests that the Government is keeping its options open on

whether the rate can increase further depending on our spending needs.

–KohSooHow,AsiaPacificIndirect TaxLeader,PwCSingapore

In sharing the longer term view to raise the carbon tax from $5 per tonne of emission to

$10–$15 per tonne emission, the Government is sending a strong message to gas emitters to

convert to energy efficient alternatives to reduce their carbon footprint. Not surprisingly, there

will be funding to support the companies to make this change and increases in U-Save to

help households defray the new tax which will be passed on to them as consumers.

–ElaineNg,Transport&LogisticsLeader, PwCSingapore

Riding on the back of unexpected higher growth and productivity outcomes, the

Government’s budget is expansive yet targeted to transform the economy through

encouraging technology and innovation. This capitalises on Asia’s expanding economic

influence and Singapore position as a key business hub.

–PeterLeHuray,GlobalTaxMarketsLeader, PwC

One could say the overall winner this year is the Singapore economy. As a whole as we move from 2017 to

2018 GDP grew 3.6% last year versus 2.4% from the year before and this is expected to continue.

–RichardSkinner,StrategyPartner,PwCSingapore

Heartening to hear about the introduction of premium subsidies for middle and lower incomes to meet the

financial demands for ensuring ElderShield remains an effective avenue

for care delivery.

–Dr.ZubinDaruwalla,Director(Healthcare),PwCSouthEastAsian

Consulting

All is not lost with the end of the PIC scheme, SMEs can now tap on the

Productivity Solution Grant (PSG) which subsidises up to 70% of

approved costs for the purchase and use of new productivity and

innovative solutions.

–LennonLee,Entrepreneurial&PrivateClientsTaxLeader,PwCSingapore

Laudable tax measures to encourage Singapore’s IP ecosystem. Enhanced tax

deduction for Research & Development in Singapore, IP registration and licence

payments should enable our SMEs to invest more on innovation and embrace greater

use of technology to be efficient and effective.

–AbhijitGhosh,CorporateTax Partner,PwCSingapore

7Budget Commentary 2018

GST changes

GST rate hike

AlleyeswereonwhethertherewouldbeanannouncementofaGSTratehikeinthisBudget. OurGSTratehasremainedat7%foralmostadecadeandtherehasbeenwideanticipationofanimpendingratehike.WhilethereisnoimmediateincreaseintheGSTrate,theFinanceMinisterannouncedthattheGSTratewillincreaseby2percentagepointsto9%anytimebetween2021and2025,subjecttospendingrequirementsandotherconsiderations.

ThisisthefirsttimethatafutureGSTrateincreasehasbeen announced during a Budget and is a change in approachcomparedtothelastratechange,whenthenewratekickedinjustmonthsaftertheannouncementinBudget2007.Wewelcomethisapproachasitfirstlyquellsspeculationandalsoallowsbusinessesandindividualstoprepareforthechange.

Need to raise taxThereisneveragoodtimetoraisetaxesortalkaboutraisingtaxes.Yet,onehastoacknowledgethatSingapore’sneedtospendonhealthcare,educationandinfrastructurehasgrownsignificantlyoverthelastdecade.TheFinanceMinisteralsoreferredtonewareasofspendingsuchassecuritytotackleterroristthreats.

Inparticular,theFinanceMinisterindicatedthatrecurring expenditure such as healthcare, should be bornebyeachgenerationofSingaporeans.Healthcarespending has doubled since the start of this decade, to an estimated$10.2billioninfinancialyear(FY)2018andisexpectedtoovertakeeducationspendingwithinthenextdecade.

8 Budget Commentary 2018

Singapore’staxcollectionswouldthereforeneedtocontinuetokeepupwithoursocialspendingifwearetoachieveabalancedBudget.TheFinanceMinistersharedthat it has been due to careful and prudent planning (includingtheraisingoftheGSTratein2007)thatwecurrentlyhavesufficientresourcestomeetourspendingneedsuntil2020.Hence,theplannedincreaseintheGSTratebetween2021and2025isnecessarytofundthe increased social spending for the next decade. The increaseof2percentagepointswillprovideSingaporewithrevenueofcloseto0.7%GDPperyear.

Withthenewrateof9%,SingaporewillstillbeamongstcountrieswithrelativelylowGST/Value-AddedTax(VAT)rates. Impact on businesses ThechangeinGSTratewillmeanthatbusinesseswillneedtoinvestresourcestoupdatetheirsystemsanddealwithtransitionalissuessuchaspricingandcontracts.Giventhattheearliesttimeofratehikeisin2021,thisshouldprovidesufficienttimeforbusinessestodealwiththe changes.

Inaddition,mostbusinessesthatareregisteredforGSTarenotexpectedtofaceanegativecostimpactfromahigherGSTrateastheyareabletorecovertheGSTontheirbusinesspurchases.However,ahigherGSTratemeansahighercostofgettingitwrongifthebusinessmakeserrorsinitsGSTreturns.

Sectorsthatwillbeaffectedbytheeventualratehikeincludefinancialservicesandrealestate.Thisisbecausebusinessessuchasthebanks,insurancecompaniesandresidentialpropertydevelopersarenotabletofullyorpartiallyclaimtheGSTontheirbusinesspurchases.Coupledwiththeintroductionofthereversechargein2020,whichrequiresGSTtobepaidonimportedservices,suchbusinesseswouldexpecttoseeanincreaseinirrecoverableGSTcostsincurredontheirbusinessexpenses.SmallerbusinessesthatarenotregisteredforGSTwillbesimilarlyaffected.Whatwillbeofconcernisthepotentialcascadingimpactwhencostsarepassedonbybusinessestoconsumers,pushingupthecostofliving.

Impact on consumersAhigherGSTratewouldmeanthatthemanonthestreetwillhavetopaymoreforhispurchases.

TheGovernmentacknowledgesthattherateincreasemeansthatthelowerincomehouseholdswillbemostaffected.ParticularlyinSingaporewhereabroadandsimpleGSTregimemeansthatbasicnecessitiessuchasfoodandtransportation(withtheexceptionofhousing),whichareexemptfromGSTorzero-ratedincertainjurisdictions,arealsosubjecttoGSTinSingapore.

Tocushionthisimpactonthelowerincomehouseholds,theGovernmenthasassuredthatitwillcontinuewithmeasuressuchas:

• AbsorbGSTonpublicly-subsidisededucationandhealthcare

• EnhancethepermanentGSTVoucherschemesoastoprovidemorehelptolowerincomehouseholdsandseniors

• Introducea(new)GSToffsetpackage

Taxing the digital economy

Inlastyear’sBudget,theFinanceMinisterreferredto ourgrowinge-commercemarketandsaidthattheGovernmentwouldbestudyinghowSingaporecan applyGSTtothedigitaleconomy.Followingtheannouncement,theInlandRevenueAuthorityofSingapore(IRAS)contactedbusinessesandindustrygroupswhichwouldlikelybeaffectedbythechangetoseekfeedbackontheproposedrules.Hence,theannouncementthattheGovernmentwillbeintroducingnewrulestotaxthedigitaleconomycomesasnosurprise.Thiswillcomeintoeffecton1January2020andfurtherdetailswillbereleasedbytheendofFebruary 2018.

9Budget Commentary 2018

Followingthisannouncement,SingaporejoinsourneighbouringcountriessuchasSouthKorea,Japan, NewZealand,TaiwanandAustraliawhichhaveintroducedsimilarrulesintherecentpast.

CurrentGSTrulesinSingaporedonotimposetaxonpurchasesfromoverseasvendorsbylocalconsumers,whichmeanslosttaxrevenuefortheGovernment.Forexample,noGSTispaidondigitalservicessuchasonlinesubscriptionsorpurchasesofmusicande-booksfromanoverseasvendor.Asforgoods,thereisa de-minimisruleforpostalimportsofgoodsvaluedbelow$400,whichdoesnotsubjectlowvalueimportstoGST.

Therearetwopartstotheproposedmechanismtotaxthedigitaleconomy,whicharealignedtoOrganisationforEconomicCo-operationandDevelopment(OECD)recommendations:

• Forbusiness-to-consumer(B2C)transactions,anoverseasvendorregistrationwillbeintroducedfortheoverseasvendortoregisterforGSTinSingaporeand to charge and collect GST on digital sales to Singaporeconsumers.

• Business-to-business(B2B)servicesthatareprocuredbycertainsectorswouldbesubjecttothereversecharge.ThereversechargehaslongbeeninourGSTlegislationbutwasneverinvokeduntilnow.

Overseas vendor registration Theproposedruleswillaffectdigitalservicesprovidedbyoverseasvendors;whiletherulestotaxlowvalueimportswillcontinuetobestudied.Inthisrespect,whilethereareanumberofotherjurisdictionswhichhaveintroducedrulestotaxdigitalservicesfromoverseasvendors,therehavenotbeenmanyjurisdictions,ifany,thathaveintroducedaneffectivecollectionmechanismtotaxlowvalueimports.WeexpecttheGovernmentistakingawait-and-seeapproachandtolearnfromtheexperiences of other countries before broadening the newrulestotaxlowvalueimports.

Underthenewregime,overseasvendorswillberequiredtoregisterforGSTiftheirglobalturnoverismorethan$1millionannuallyandtheironlinesalestoSingaporeexceed$100,000.The$1millionturnoverthresholdisnotsurprisingasitisalignedwiththecompulsoryGSTregistration threshold in Singapore. What is surprising is the threshold for the GST registration under the proposedoverseasvendorregistrationregime,whichismuchlowerat$100,000forsalestoSingaporeconsumers.Wecanonlyguessthattheintentionistocastawidernettosubjectmoreoftheonlinebusinessesto Singapore GST.

IfthereisaquestionofhowtheGovernmentwouldbeabletoenforcetheregistrationforoverseasvendors,wemustbearinmindthatthetaxauthoritieshavearrangementsthatwouldenablethejurisdictionstoexchangeinformationonoverseasvendorsthatareregistered in the local territories.

Whatiscertainaboutthenewrulesisthatitwillprovideanewandsustainablesourceoftaxrevenuewhichcanonlyriseasquicklyasthegrowthinthedigitaleconomy.

Reverse chargeThereversechargeisacommonfeatureofGST/VATregimes,butwhenGSTwasintroducedin1994,theGovernmentdecidednottoeffectthereversechargeprovisionasitwasdeterminedthatoperationalandcompliancecostsmayoutweighthetaxbenefits.Itwasalsoatatimewhencross-borderserviceswererelativelyinsignificantinvolumeandvalue.Withtheincreaseincross-bordertransactionsinthedigitaleconomy,thereversechargemechanismisnecessarytoensureSingaporeGSTiscollectedonimportedB2Bservices.

Themajorityofthebusinessesthatwillbeaffectedbytheintroductionofthereversechargewouldbethoseinthefinancialservicesandrealestatesectors,wheremostifnotallofsuchbusinessesarenotabletofullyrecovertheirinputGST.CharitiesorvoluntarywelfareorganisationsthatareGST-registeredandreceivedonationsorgrants,aswellasbusinessesnotregisteredforGST,willalsobeaffected.

Operationally,affectedbusinesseswouldneedtoidentifyandtrackpaymentstooverseasserviceproviders(includingrelatedparties)andassesstheGSTtreatmentandimpact.SystemchangeswouldberequiredtocapturetheadditionalreportingrequirementsandpaymentofGSTtotheIRAS.

Budget2018presentsawatershedyearforGSTchanges,albeitwithadeferredstartdate.

10 Budget Commentary 2018

Corporate income tax rebate %%

Partial Tax Exemption (Income taxable at normal rate)

YA 2010 to 2019 YA 2020 onwards

Chargeable income

Exempt from tax

Exempt income Chargeable income

Exempt from tax

Exempt income

First $10,000 75% $7,500 First $10,000 75% $7,500

Next$290,000 50% $145,000 Next$190,000 50% $95,000

Total $152,500 Total $102,500

Start-Up Tax Exemption (Income taxable at normal rate)

YA 2010 to 2019 YA 2020 onwards

Chargeable income

Exempt from tax

Exempt income Chargeable income

Exempt from tax

Exempt income

First $100,000 100% $100,000 First $100,000 75% $75,000

Next$200,000 50% $100,000 Next$100,000 50% $50,000

Total $200,000 Total $125,000

Partial Tax Exemption and Start-Up Tax ExemptionThepartialandstart-uptaxexemptionswereintroducedinthe2000s,initiallytohelpbusinessesweathertheeconomicdownturninthoseyears.Inthisyear’sBudget,theFinanceMinisterproposedthatthepartialtaxexemptionbeappliedtothefirst$200,000ofchargeableincome,downfrom$300,000previously.Forcompanies

AccordingtotheIRAS,only38%ofallcompaniesassessedinYA2016wereinataxpayingposition1. Companieswithchargeableincomeabove$200,000madeuponlyabout8%ofallcompaniesassessedin YA2016.Assuch,thepercentageofcompaniesthatareaffected by this change should not be high as the tax exemptionsarenotmaximised.

Tosupportbusinessescopingwithrisingcostsandtohelpthemmaintaintheircompetitivenesseveninatimeofimprovedeconomicoutlook,twochangeswereannouncedbytheFinanceMinister:

• anenhancementtoincreasethecorporateincometaxrebateforYA2018to40%oftaxpayable(fromthepreviouslyannounced20%),cappedat$15,000,and

• anextensionofthecorporateincometaxrebateof20%oftaxpayable,cappedat$10,000forYA2019.

1 Tax Statistics, IRAS website https://www.iras.gov.sg/irashome/Publications/Statistics-and-Papers/Tax-Statistics/#NewBookmark (accessed on 20 February 2018)

enjoyingthestart-uptaxexemption,theywillhave75%oftheirfirst$100,000ofchargeableincomeexemptfromtaxasopposedtoafullexemptionpreviously.50%ofthenext$100,000ofchargeableincomewillbeexemptfromtax,ratherthan$200,000previously.AllchangeswilltakeeffectfromYA2020.

Thesechangescollectivelywilltranslateintohighereffectivetaxrates,especiallyforsmallandmedium-sizedenterprises(SMEs),whicharethemainbeneficiariesofthesebroad-basedexemptionschemes,althoughtheincreasewillbemitigatedbytheenhancementtothecorporateincometaxrebateforYAs2018and2019.

11Budget Commentary 2018

Enhanced tax deduction for R&D

Businessescurrentlyenjoy150%taxdeductionforqualifyingexpenditureincurredonqualifyingR&DactivitiesuptoYA2025underSection14DA(1)oftheIncomeTaxAct.Althoughthereisnocapapplicableforthisprovision,thefurther50%deductionisonlyapplicableforstaffcostsandconsumablesincurredforqualifyingR&DactivitiesconductedinSingapore.

InordertomaintainanattractivefiscalregimeforR&DactivitiesinSingapore,particularlywiththelapseoftheenhanceddeductionsunderthePICschemeinYA2018,theGovernmenthasincreasedthefurtherdeductionfrom50%to150%forstaffcostsandconsumablesincurredonqualifyingR&DactivitiesconductedinSingaporefromYA2019toYA2025.

ThroughtheenactmentofR&Dtaxincentivesandgrantprogrammes,governmentsinvariousjurisdictions,similartoSingapore,havesoughttoencouragebusinessestoinvestfurtherinresearch.Suchresearchincentivescomeintheformoftaxcredits,superdeductions,orevencashgrants.Forexample,theHongKongGovernmentannouncedinthelastquarterof2017thatcompaniescanclaimenhancedR&Ddeductionsof300%onqualifyingR&DexpenditureonthefirstHK$2million(approximately$335,500),withafurther200%taxdeductionavailablefortheremainingexpenditure.

R&D conducted overseasWiththeexpiryofthePICscheme,qualifyingR&Dactivitiesconductedoverseaswouldnotqualifyforenhanced deductions.

Relevance of Section 14E further deductionWiththisenhancement,thefurtherdeductionforapprovedR&DprojectsprovidedforinSection14EoftheIncomeTaxActmayloseitslustre.Thereappearstobeminimalbenefittobederivedbyseekingapprovalfora200%deductionwhentheproposedenhancementalreadygrantsa250%deduction,unlesstheenhanceddeduction is sought under section 14E for expenses other thanstaffcostsandconsumablesandtaxpayerisseekingupfrontapprovaloftheprojecttobeundertaken.

Enhanced tax deduction for IP licensing

Underthenow-lapsedPICscheme,businessescouldclaima400%taxdeductionforthefirst$400,000spentonlicensingqualifyingIntellectualProperty(IP)rightseach year.

Tosupportbusinessesto“buyandusenewsolutions”,betweenYAs2019and2025,businessesmayclaimadoubledeductionforthefirst$100,000ofqualifying IPlicensingpaymentsmadeeachyeartothirdparties. ThedeductioncanbeclaimedasageneralbusinessexpenditureunderSection14oftheIncomeTaxAct, orasR&DexpenditureunderSection14DassumingtheprojectisaqualifyingR&Dproject.

Withanannualcapof$100,000,themeasureappearstargetedatSMEs.

Enhanced tax deductions to promote innovation

The increased tax deduction signals the Government’s continued support for businesses to carry out their R&D projects in Singapore.

Qualifying IP licensing cost refers to expenditure incurred on the licensing of qualifying IP (patents, copyrights (excluding rights to use software), registered designs, geographical indications, lay-out designs of integrated circuit, trade secrets or information that has commercial value, and plant varieties), including payments made to publicly funded research performers or third party businesses. However, it excludes legal fees, expenditure incurred in relation to the transfer of ownership of the rights, and any amount that is offset by grants or subsidies from the Government or a statutory board.

The double deduction is not given for the licensing of IP such as trademarks, brand names, customer lists and for information on certain work processes. It is also not available for rights for which IP writing-down allowances (under Section 19B of the Income Tax Act) was previously allowed.

12 Budget Commentary 2018

Enhanced tax deduction for IP registration costs

IPregistrationwasanotherqualifyingactivityunderthePICscheme–thefirst$400,000spentonIPrightsregistrationwaseligiblefora400%taxdeduction –thathassincelapsed.

WiththeexpiryofthePICscheme,businessesareonlyentitledtoclaima100%taxdeductionforqualifyingIPregistrationcoststhoughtheprovisionisscheduledtolapseafterYA2020.

Toencouragebusinesses,especiallySMEs,tofurtherdevelop,registerandprotecttheirownIP,thedeductionschemehasbeenextendedtillYA2025.Further,ithasbeenenhancedfromYA2019suchthatthefirst$100,000ofIPregistrationfeesincurredeachyearcanqualifyfordouble tax deduction. Qualifying costs in excess of $100,000 continue to be eligible for 100% tax deduction.

Other tax changes Double Tax Deduction for Internationalisation

TheexpenditurecapforclaimswithoutpriorapprovalfromIESingaporeortheSingaporeTourismBoard(STB)willberaisedto$150,000perYA.BusinessescancontinuetoapplytoIESingaporeorSTBforqualifyingexpensesexceeding$150,000,orforexpensesincurredonotherqualifyingactivities.

Investment allowance for submarine cable systems landing in Singapore

Singaporehasbeenactivelyseekingwaystotapintotheeconomicactivitiesresultingfromtheexponentialgrowthinglobalinternettraffic.Akeystrategyistoencourage the location of data centres in Singapore and submarinecablesareakeycomponentintheinfrastructure.Toenhanceourattractivenesstotechnologyandtelecommunicationsserviceproviders,theinvestmentallowanceschemewillbeextendedtocoverqualifyingcapitalexpenditureonnewlyconstructedstrategicsubmarinecablesystemslandinginSingapore.WhiletheFinanceMinisterdidnotspecifythepercentageoftaxallowanceintheBudgetannouncement,upto100%additionalallowance canbeapprovedunderthelaw.

13Budget Commentary 2018

ItshouldbenotedthatevenwherethesubmarinecablesystemisusedoutsideSingaporeorleasedoutundertheindefeasiblerightsofusearrangements,theinvestmentallowanceisstillavailable. Withholding tax exemption for container leases

Thewithholdingtaxexemptionforqualifyingcontainerleaseswasfirstintroducedin1979toencouragethegrowthofthemaritimeindustry.

Areviewdateof31December2022willbeintroducedwherebythewithholdingtaxexemptiononpaymentstoanon-residentlessorfortheleaseofaqualifyingcontainerforthecarriageofgoodsbyseawilllapse,unless extended.

Withtheimpendingadoptionofthenewaccountingstandard for leases for accounting periods starting 1January2019,itisanticipatedthatthiswithholdingtaxexemptionwillhavetobereviewedanywayasthenewleasingstandardwillhavesignificantimpactacrossvarioussectorsofthemaritimeindustry.

Donations

The250%taxdeductiononqualifyingdonations madetoInstitutionsofaPublicCharacter(IPCs) andqualifyingexpenditureundertheBusinessand IPCPartnershipSchemewillbeextendedto 31December2021.

$

$$$

$

14 Budget Commentary 2018

Asset and wealth management

Singapore’sassetandwealthmanagement(AWM)sectorcontinuedtoseeagrowthintotalassetsundermanagement(AUM)bySingapore-basedassetmanagers.TheAUMasatend2016grewby7%tohitthe$2.7trillionmarkascomparedto2015.

ToensurethatthecountryremainsattheforefrontastheAWMhubofchoiceinAsia,Singaporehascontinuouslysought to address the needs of the sector and to deepen theAWMecosystem.Wehaveseensomehitsandmissesin this Budget for the sector.

Singapore Variable Capital Company

Lastyear,theMonetaryAuthorityofSingapore(MAS)issuedaconsultationpaperontheS-VACCframework,whichcreatedabuzzintheindustry.Taxconsiderationswere,however,notdiscussedinthatpaper.Manyindustryplayershavesincegivenfeedbackontheir‘wishlists’forthetaxfeaturesofS-VACC.ThelongawaitedgoodnewsonthetaxtreatmentforS-VACCsarefinallyreleased in this Budget.

Thetaxexemptionschemesundersections13Rand13XoftheIncomeTaxActandtheGSTremissionforfundsapprovedundertheseschemeswillbeextendedtoS-VACCs.Undertheseschemes,S-VACCscanachievetaxneutralityprovidedthattheyderiveonly“specifiedincome”from“designatedinvestments”.FundmanagersapprovedundertheFinancialSectorIncentive–FundManagement(FSI-FM)Schemewillalsoenjoya10%concessionarytaxrateonincomederivedfrommanagingS-VACCsapprovedunderthe13R/13XSchemes.S-VACCswillthereforebepositionedonalevelplayingfieldvis-à-visthecurrentinvestmentfundsapprovedunderthe13R/13XSchemes.

ConditionsundertheexistingschemescontinuetoapplytoS-VACCs.Oneoftheconditionsunderthe13XSchemeisthattheapplicantfundneedstohaveaminimumfundsizeof$50millionatthepointofapplication.Certaintypesofinvestmentfundsareallowedtomeetthefundsizeconditiononcommittedcapitalbasis.OneofthekeyfeatureofS-VACCsisthatitcanbesetupasastandalonefundorasanumbrellastructurewithmultiplesub-fundsandshare-classes.Fromataxadministrationstandpoint,onlyonesetoftaxreturnsneedstobefiledwiththeIRASbyeachS-VACCwhetheritisstandaloneoranumbrellastructure.SincetheBudgetclarifiedthatanS-VACCwillbetreatedasacompanyandasingleentityfortaxpurposes,itshouldfollowthatthe$50millionconditionappliesatS-VACClevelregardlessofthenumberofsub-fundswithintheS-VACC.

Ontheotherhand,fundssuchasnewlyset-upS-VACCsandventurecapital(VC)fundsmayfacepracticaldifficultiesinmeetingthe$50millionfundsize,giventhesmallerticketsizetheymayhavefromtheirinvestors.Inaddition,fornewretailfunds,theymayalsohavepracticaldifficultiesinmeetingtherequirementsunderthe13RScheme.Suchfundsaretypicallysoldtoinvestorsthroughthird-partydistributorsandthefundmanagersmaynothaveinformationontheprofileoftheinvestorstoconfirmthatthe13Rschemeconditionscanbemet.Wehopethatintimetocome,the13XconditionsforS-VACCscanbetailoredtomoresubstance-basedconditionstofacilitatetheuptakeoftheS-VACC.

Thecurrent13R/13XSchemesalsoprovideforwithholdingtaxexemptiononinterest-relatedpaymentsmadebyapproved13R/13Xfunds,subjecttoconditions.TheBudgetwassilentonwhetherthiswithholdingtaxexemptionwouldsimilarlybeextendedtoS-VACCs. WehopethiswillbeclarifiedwhentheMASreleasesfurtherdetailbyOctober2018.ThiscouldotherwiselimittheuseofS-VACCsbyfundswhosestrategyinvolvesleverage.

Onbalance,S-VACCsareexpectedtogiveSingaporeandbringaboutanattractiveedgeasitseekstobecomeapreferredcentrefordomicilingandmanaginginvestmentfunds.Wealsoexpectthatthiswillgeneratepositivespin-offtotheentirefinancialservicesecosysteminSingapore.

15Budget Commentary 2018

Enhancement to 13X Scheme

The13RSchemeappliesonlytofundssetupintheformofcompanies,whilethe13XScheme(whichistheenhancedscheme)appliestofundsthataresetupascompanies,trustsandlimitedpartnerships(certainexceptionsapply).Manyfundstodayarestillsetupoffshoreduetoinvestors’familiarityandpreference.Thesefundsmaybesetupinstructures/legalformsaccordingtoforeignlaw,andarenotrestrictedtocompanies,trustsandlimitedpartnerships.CommonforeignstructuresusedforfundsincludeLuxembourgfonds commun de placement.

Ithasbeenannouncedthatthe13XSchemewillbeavailabletoallfundvehiclesconstitutedinallforms,providedthequalifyingconditionsaremet.Thisappliestonewawardsapprovedonorafter20February2018.WebelievethatthisenhancementshouldprovidemoreflexibilitytoSingapore-basedfundmanagersinchoosingthesuitablelegalformfortheinvestmentfundstheymanage.FurtherdetailsofthechangewillbereleasedbyMay2018.

Wealsohopethatthesameenhancementcanbeintroducedtothe13Rand13CASchemes(whichprovidefortaxexemptionlargelyforinvestmentincomeofforeigncompanies,trustsandindividuals)tocatertoinvestmentfundsthatcannotmeetthe13Xqualifyingconditionssuchasminimumfundsize.

Venture capital

Asexpected,thisBudgetcontinuestofocusontechnologyanddigitaltransformation.TheFinanceMinistertouchedon“makinginnovationpervasiveinoureconomy”.VCplayersandinvestorscouldactaskeycatalyststothisastheyprovideasourceoffundingfortechnologystart-ups.Singaporehasseena32%growthintheAUMforVCmanagersin2016ascomparedto2015.TherehasalsobeenarecordvalueofVCinvestmentsinSingaporeinvolvingthreemegadealsbeingGrab,LazadaandSEA.

ToaddresstheboomingVCspaceinAsia,on20October2017,theMASintroducedthesimplifiedregulatoryregimeforVCmanagerswhichhasbeenwell-received. Injustoverthreemonths,wehaveseeneightVCmanagersapprovedunderthisregime.WehopeSingaporewillcontinuetosupporttheVCplayersinamoreholisticmannerbytailoringthetaxregimetoVCfunds.Forexample,theminimumfundsizeconditionfor13XforVCfundsandFSI-FMforVCfundmanagerscouldbelowered.

Extension of sunset clause

Thesunsetclauseforapplicationforthe13Rand13XSchemesiscurrentlysetat31March2019.Itwouldbe aboosttotheassetmanagementindustryiftheGovernmentcouldannouncetheextensionoftheaboveincentivesaheadofnextyear’sBudget.TheleadtimebetweenaBudgetannouncementofsuchanextensionandtheexpirydateisjustatadtooshort.Thisgiveslittleroomforfundmanagerstoreactandplan.Upfrontcertaintyoftheextensionwouldhaveallowedfundmanagerstoraisefundswithgreatervisibilityoftheassociated tax costs to the fund structure, thereby resultingingreaterinvestorconfidence.

Overall,thechangesaredefinitelywelcomedbytheindustry players and a step in the right direction.

16 Budget Commentary 2018

Financial sector

Financial Sector Incentive scheme

TheFinancialSectorIncentive(FSI)scheme,whichisaschemethataccordsconcessionarytaxratesonincomefromqualifyingbankingandfinancialactivities,headquartersandcorporateservices,fundmanagementandinvestmentadvisoryservices,wasduetoexpireattheendof2018.ItisthereforetimelythattheFinanceMinisterhasannouncedtheextensionoftheFSIschemeto31December2023.TheextensionshouldhelpmaintainSingapore’scompetitivenessasafinancialhubandattractnewentrantstoSingapore,aswellasencourageexistingfinancialinstitutionstoexpandtheiroperations here.

Inlastyear’sBudget,thetaxincentivesforprojectandinfrastructurefinancewereextendedto31December2022.BuildingonthatmomentumandwithaviewtoparticipatingintheexpandingAsianinfrastructuremarket,theFSIschemewillbeenhancedtoincludetrading in loan collaterals that are prescribed infrastructureassetsorprojects.Thisenhancement,whichisinlinewithSingapore’sgoaltobeafullserviceAsiainfrastructurehubasnotedintheFinancialServicesITM,willnodoubtbewelcomedbyindustryplayers.However,thechangewillapplytoincomederivedon orafter1January2019fornewandrenewalawardsapprovedonorafter1June2017,whichmeansthatFSIawardholderswhoseincentivewasgrantedunderthepreviousFSIscheme(whichoffersa12%concessionarytaxrateforstandard-tieractivities)willnotbenefitfromthisenhancement.

TheMASwillreleasefurtherdetailsbyMay2018.

Tax deduction for impairment losses on non-credit impaired loans and debt securities

Banks,merchantbanksandfinancecompaniesinSingaporearerequiredbytheMAStorecogniseadequateimpairmentlossesagainstthecarryingamountofloansandinvestmentsintheirbookstakingintoaccounttherequirementsunderFinancialReportingStandard(FRS)39.WithFRS109comingintoeffectforfinancialyearsbeginningonorafter1January2018,impairmentlosseswillberecognisedforbothcredit-impairedandnon-creditimpairedfinancialinstruments.

Whiletheformerisdeductibleundergeneraltaxprinciples as an incurred loss, the latter is not deductible butfortheconcessionarytreatmentaccordedunderSection14IoftheIncomeTaxAct(whichprovidestaxreliefforgeneralprovisions,subjecttocertaincaps).ItisthusapositivemovethattaxdeductionunderSection14IoftheIncomeTaxActhasbeenextendedforbanksandqualifyingcompanieswhichwouldotherwisenotbeabletoclaimimpairmentlossesfornon-creditimpairedfinancialinstrumentsaswellasadditionalallowancesmadeunderregulatoryrules.TheavailabilityoftheSection14IdeductionisextendedtoYA2024(forDecemberfinancialyearend)or2025(fornon-Decemberfinancialyearend).

Rationalise withholding tax exemptions for the financial sector

Interestpaymentsmadetonon-residentsaregenerallysubjecttowithholdingtax.Inthecaseofthefinancialsector,abroadrangeofexemptionsapply.TheFinanceMinisterhasannouncedtherationalisationofthevariouswithholdingtaxexemptionscurrentlyavailableforthefinancialsector,withareviewdateof31December2022setforthefollowingwithholdingtaxexemptions:

17Budget Commentary 2018

• Paymentsmadeundercross-currencyswaptransactionsmadebySingaporeswapcounterpartiesto issuers of Singapore dollar debt securities

• PaymentsmadeunderinterestrateorcurrencyswaptransactionsbyfinancialinstitutionsortheMAS

• Specifiedpaymentsmadeundersecuritieslendingandrepurchaseagreementsbyspecifiedinstitution

TheGovernmentwillalsolegislatethewithholding taxexemptionsforinterestonmargindepositspaidbymembersofapprovedexchangesfor(a)transactionsinfutures, and (b) non-Singapore dollar spot foreign exchangetransactions,bothinrelationtoagreementsmadeonorafter20February2018.Likewise,theseexemptionswillhaveareviewdateof31December2022.

Thewithholdingtaxexemptionswillbewithdrawnforthefollowingpaymentsunderagreementsmadefrom 1January2019:

• InterestfromapprovedAsianDollarbonds

• Paymentsmadeunderover-the-counter(OTC)financialderivativesbycompanieswithFinancialSectorIncentive-DebtMarket(FSI-DM)awardsapprovedonorbefore19May2007

Notallfinancialderivativespaymentstonon-residentsnecessarilyattractwithholdingtax.Further,giventhereisabroad-basedwithholdingtaxexemption(includingOTCfinancialderivativepayments)applicabletobanks,financecompaniesandcertainapprovedentities,theimpendingwithdrawalsshouldhaveminimalimpact.

Thatbeingsaid,itremainsvitaltoensurethatwithholdingtaxexemptionsforinterestandrelatedpaymentsbeavailableafter31December2022inorderforSingaporetoremaincompetitivewithotherfinancialcentrese.g.HongKongorLondonwherethereisnowithholdingtaxonsuchpayments.

TheMASwillreleasefurtherdetailsbyMay2018.

Qualifying debt securities

Thequalifyingdebtsecurities(QDS)scheme,whichaccordswithholdingtaxexemptiononinterestandrelatedpaymentsmadetonon-residentsoraconcessionary tax rate for Singapore-based corporate bondholders,hasbeeninstrumentalinthedevelopmentofadebtcapitalmarketinSingapore.Thescheme,whichisduetolapseafter31December2018,willbeextendedtill31December2023,consistentwiththeFinancialServicesITMinitiativeforSingaporetobealeadingcentreforAsiafixedincomeinstruments.TheQDS+incentiveschemewill,however,beallowedtolapseafter31December2018.

Verybroadly,theQDS+schemecurrentlygrantstaxexemptionforallinvestorsonqualifyingincomederivedfromQDSthataredebtsecurities(excludingSingaporeGovernmentSecurities)withanoriginalmaturityofatleast10years.WiththeexpectedlapseintheQDS+scheme,debtsecuritieswithtenurebeyond10yearsthatareissuedafter31December2018canenjoytaxconcessionsundertheQDSschemeiftheconditionsoftheQDSschemearesatisfied.Debtsecuritieswithtenurebeyond 10 years that are issued on or before 31 December2018cancontinuetoenjoythetaxconcessionsundertheQDS+schemeiftheconditionsoftheschemearemet.

TheMASwillreleasefurtherdetailsbyMay2018.

18 Budget Commentary 2018

Tax exemption scheme on income derived by primary dealers from trading in Singapore Government Securities

WiththeextensionoftheQDSschemeto31December2023andtostrengthenSingapore’sprimarydealernetwork,thetaxexemptiononincomederivedbyprimarydealersfromtradinginSingaporeGovernmentSecuritieswillalsobeextendedtill31December2023.

Approved Special Purpose Vehicles

Inlinewiththeextensionoftheincentivestoencouragedevelopmentofthebondmarket,thetaxincentiveforApprovedSpecialPurposeVehicles(ASPVs)engagedinsecuritisationtransactionshassimilarlybeenextendedto31December2023.However,onlytheincometaxexemption,withholdingtaxexemptionandGSTrecoverybenefitswillbeextended.Thestampdutyremissionthatiscurrentlyincludedaspartoftheincentivepackagewillbeallowedtolapseafter31December2018.Thewithdrawalofthestampdutybenefit(whichpertainstoSingaporeassets)isconsistentwiththatobservedforotherincentiveschemesinrecentyears,includingforlisted REITs and listed entities holding infrastructure projects/assets.GiventhegrowthoftheSingaporefinancialsectorhasmostlybeenfromtheoffshoremarkets,theremovalofthisstampdutybenefitisnotexpectedtoimpedethesecuritisationactivitieshere.Furthermore,thetypeofassets/riskstobetransferredtoASPVsmaynotnecessarilyattractSingaporestampduty.TheMASwillreleasefurtherdetailsbyMay2018.

ToencouragemorewidespreaduseoftheASPV,itishopedthatinthenearfuture,theschemecanbeenhancedsuchthatitsconcessionarytaxtreatmentwillautomaticallyapplyoncetheprescribedconditionsaremet,similartotheQDSincentive.Thiswillputusonabetterfootingcomparedtoothersecuritisationdomicilessuch as Ireland.

Real Estate Investment Trust Exchange-Traded Funds

Forvariousreasons,investinginrealestateinvestmenttrustexchangetradedfunds(REITETFs)maybeamoreattractiverouteforinvestorswhowishtogainexposuretoS-REITsthandirectlyowningunitsintheS-REITs.WhileprovidingasimilareconomicpayoffprofileasholdingunitsinindividualS-REITs,REITETFsalsoprovideinvestorswithriskdiversification,andtheabilitytobepassiveinvestorswithouthavingtoresearchandmanagetheirownS-REITsportfolio,norworryaboutnotmeetingtheminimuminvestmentsizesorrightsissuesofanS-REITwhichcouldotherwiseresultindilutionoftheir interest in the S-REITs.

However,underthecurrenttaxtreatmentofaREITETF,theseinvestorswillsufferataxleakagecomparedtoadirectinvestmentmadeinS-REITs.

Undercurrentlaw,distributionsmadeoutofspecifiedincomebyanS-REITtoindividuals(whodonotderivethe distribution through a partnership in Singapore or fromthecarryingonofatrade)areexemptfromSingaporetax.Suchdistributionswhenmadetoqualifyingnon-residentnon-individuals(e.g.non-residentcorporateinvestorswithnopermanentestablishmentinSingapore)aresubjecttoafinalwithholdingtaxof10%.

However,whereaSingapore-basedREITETFinvestsinanS-REIT,distributionsmadeoutofspecifiedincometoitwouldbesubjecttowithholdingtax,currentlyat17%.TheREITETFisinturnsubjecttoSingaporetaxonthedistributions (net of deductible expenses) at the prevailingcorporateincometaxrateof17%,whichmayresultintheinvestorsbeingtaxedatahighereffectivetaxratethantheyhadinvestedintheS-REITdirectly. Inaddition,althoughtheREITETFcanclaimtaxdeductedatsourceonthewithholdingtax,thisnonethelesspresentsacashflowissue.

19Budget Commentary 2018

Froma(after-tax)yieldperspective,itisthereforemoreadvantageousforindividualsandnon-residentcorporateinvestorstoinvestdirectlyinS-REITsasopposedtoinvestinginS-REITsthroughaREITETF.

ItisproposedthatataxtransparencytreatmentbeaccordedtodistributionsreceivedbyREITETFsfromS-REITs. We expect the conditions for granting tax transparencytoS-REIT(e.g.therequirementtodistributeatleast90%ofitstaxableincome)besimilarlyapplied to REIT ETFs. With tax transparency, the tax treatmentofS-REITdistributions(receivedthroughtheREITETF)inthehandsofunitholderswoulddependontheirprofile,whichisasfollows:

• IndividualunitholderswhoderiveanydistributionthroughapartnershipinSingaporeorfromthecarryingonofatrade,businessorprofession–taxattheindividual’staxrate

• Otherindividualunitholders–taxexempt

• Otherqualifyingunitholders(e.g.Singaporeresidentcorporates)–taxattheirrespectivetaxratesunlessotherwiseexempt

• Qualifyingnon-residentnon-individualunitholders(e.g.non-residentcorporateinvestors)–10%

• Othernon-residentnon-individualunitholders–prevailingcorporateincometaxrate,currently17%.

ThisconcessionforREITETFswilltakeeffectonorafter1July2018,withareviewdateof31March2020,whichisthesameasthatforothertaxconcessionsforS-REITs.ApplicationforthetaxtransparencytreatmentcanbesubmittedtoIRASonorafter1April2018.

TheMASandIRASwillreleasefurtherdetailsofthechangebyMarch2018.

TheproposedchangebringsmorealignmenttothetaxtreatmentofinvestmentsinS-REITsandshouldbewelcomedbytheindustry.Fromataxperspective,investorsshouldnotbeplacedatadisadvantageiftheywishtoinvestthroughfundvehiclesthataremanagedbyfundmanagersasopposedtomakingtheseS-REITinvestmentsdirectly.Thechangeshouldincreaseinvestor’sreturns,anditishopedthatthiswouldencouragemoreREITETFlistingsinSingapore.

• Forindividualinvestors(whodonotderivedistributions through a partnership in Singapore or fromthecarryingonofatrade,businessorprofession),thesunsetclauseof31March2020

introducesuncertaintyastohowthedistributionstheyreceivethroughtheREITETFwillbetaxediftheconcessionisnotrenewedorgrandfathered.ThereisnosuchuncertaintyiftheyinvestintheS-REITdirectlyasthereisnoequivalentsunsetclause.

• However,itisunclearhowthesunsetclauseof 31March2020willoperateiftheconcessionisrevoked.Therewouldbeinconsistencyinthetaxpositionofindividualunitholders(whodonotderivedistributions through a partnership in Singapore or fromthecarryingonofatrade,businessorprofession)inaREITETFshouldtheirtaxtreatmentbe tied to a sunset clause, as there is currently no equivalentsunsetprovisionforindividualsholdingunits in S-REITs.

• ItremainstobeseenwhethertheeffectivedateofthetaxconcessionappliestoS-REITs’distributionincomethathasbeenaccruedbyREITETFsbefore1July2018;orifitappliestodistributionsthathavebeenpaidtotheREITETFsonorafter1July2018.

WehopethatmoreclarityontheabovewouldbeprovidedinMarch2018.

WhileweapplaudtheproposedchangeforREITETF,itwouldhavebenefitedtheSingaporefundindustrymoreifthesametreatmentisaccordedtothefollowing:

• AnycollectiveinvestmentschemesthatinvestinS-REITs

• SingaporefundsthataremanagedbySingapore-basedfundmanagerswhichareapprovedundertheavailablefundincentiveschemes(e.g.SingaporeResidentFundscheme,Enhanced-tierFundscheme).

Withtheincreaseofmassaffluentandhighnetworthindividualsintheregion(moresothanever),moreindividualinvestorsaresettingupfamilyofficesorinvestingthroughfundstructuresmanagedbyfundmanagers,asopposedtomakinginvestmentsintheirpersonal capacity. Without extending the tax transparencytreatmenttoREIT-focusedfundsandSingaporefunds,itisdisadvantageousforindividualstoinvestinS-REITsthroughfundstructuressetupbySingaporefundmanagers/Singaporefamilyofficessincethereistaxleakage.Wethereforehopetoseeasimilarchangeintaxtreatmentforthefundmanagement/familyofficeindustryinthenearfuturetoachieveparityintaxtreatmentbetweeninvestingdirectlyinS-REITandviaSingaporefunds.

20 Budget Commentary 2018

TheFinanceMinisterannouncedanextensionoftheInsuranceBusinessDevelopment–InsuranceBrokingBusiness(IBD-IBB)schemetill31December2023.TheSpecialisedInsuranceBrokingBusiness(SIBB)willbeallowedtolapseafter31March2018.Withthelapseofthescheme,specialisedinsurancebrokingandadvisoryserviceswillbeincentivisedundertheIBD-IBBscheme,at the concessionary tax rate of 10%.

TheinsuranceindustryinSingaporehasseennumeroustaxincentivechangesinthepastyear.Giventhatinsuranceisaglobalandmobilebusiness,akeyquestionwemightaskisthis:howdothesechangesshapeupagainst the challenges faced by insurers in a global marketplace?Moreimportantly,amidstincreasinglycompetitiveglobalconditions,amorepressingconcernishowthesetaxlawsandchangeswillseeourinsurersthroughthechallengesoftomorrow.

Insurance tax incentives

WhatmayhavebeenmoresignificantfortheinsuranceindustryistherefinementoftheIBDschemein2017madetothescopeofqualifyingunderwritingandinvestmentincome.Followingyearsofindustryfeedback,theMASexpandedthescopeofqualifyingincometoincludeonshoreincomefromunderwriting,investmentandbrokingactivitieswhereapplicablefortheapprovedinsurers.Thesechangeswerebalancedbyspecificexclusionsforspecifiedclassesofinsuranceincomederivedinrespectofonshoreandoffshorefire,motor,workinjurycompensation,personalaccidentandhealth insurance businesses.

ThenewIBDschememay,onfirstinstance,appeartobeagenerousexpansionofscopetoincentivisequalifyingincomefrominsurers’onshorebusiness,insteadofjusttheoffshorebusiness.However,themostrecentindustrydataavailableshowsthattheexcludedlinesofbusinesses(i.e.fire,motor,workinjurycompensation,personalaccidentandhealth)accountforapproximately71%2 and 86%3ofthetotalgrosspremiumsoftheSingaporeInsurance Fund and the Offshore Insurance Fund businessrespectively,thusreducingmuchofthescope oftheincentive.

Insurance

Giventheabove,werecommendareviewoftheexcludedscopeofqualifyingincomeinviewofthesignificancetheyrepresenttoinsurers’domesticbusiness. The exclusion of these lines of businesses also maketheexecutionofincentiveclaimscumbersome,astheywarrantdetailedtracking,identificationandapportionmentofincomebyinsurers.ThiscreatesdifficultiesforinsurersseekingtoenjoytheexpandedbenefitsundertheIBDincentives.

TheIBDincentivesgenerallyoffersataxrateof10%overthelast30years.Incomparisontoregionalcounterparts,Singapore’sincentivisedtaxratesundertheIBDschemearestilluncompetitive.Considerablyourbiggestcompetitor,HongKongoffersan8.25%taxrate(beinghalfofitscorporatetaxrateof16.5%)onoffshorereinsurancebusiness,furthercomplementedbyitsoffshoreincomeexemptionwhereprofitssourcedfromoutsideHongKongarenottaxable.Malaysiaalsoposesseriouscompetition,witha5%taxrateonoffshoreinsuranceandinwardreinsurancebusiness.

Withtheseinmind,SingaporeshouldconsiderreducingtheIBDincentivetaxrate.Thiscouldbepeggedtoaproportion of the corporate tax rate, to ensure that the incentiverateiscontinuallyadjustedinlinewiththecorporate tax rate.

2 71% is calculated based on the General Insurance Business Gross Premiums of Singapore Insurance Fund business by line, which is published under the Insurance Statistics 2016 on the MAS website.

3 86% is calculated based on the General Insurance Business Gross Premiums of Offshore Insurance Fund business by line, which is published under the Insurance Statistics 2016 on the MAS website.

21Budget Commentary 2018

Shaping Up in a Competitive Market

Leavingasideincentives,theMASshouldbecommendedforitsvisiontomakeSingaporeaglobalcapitalforAsiarisktransfer.Attheendof2017,theMASannounceditsstrategytodevelopSingapore’salternaterisktransfermarketthroughinsurance-linkedsecurities(ILS)andpublic-privatepartnerships.

ILS, such as catastrophe bonds, enable insurers and reinsurerstotransfersomeoftheirriskstothecapitalmarkets.TospurthedevelopmentofSingapore’sILSmarket,theMASwillfundtheupfrontcostsincurredinissuingcatastrophebonds.Thegrantwillrunfrom 1January2018,andwillbeapplicabletoILSbondscoveringallformsofrisksbeyondjustnaturalcatastropherisks.

TotaptheopportunitieswithChina’sOneBeltOneRoad(OBOR)projects,aSingapore-basedinfrastructureconsortiumhasbeenformedwithChinaReSingapore.Theconsortiumisenvisagedtoprovidetop-upcapacityandspecialisedinsurancecoverageandriskmanagementservicesforOBORprojectsintheAsia-PacificregionexcludingChina.BringingtogetherSingapore-basedinsurers,reinsurersandbrokers, theconsortiumwillstartwithtwolinesofbusiness–constructionaswellasprojectcargoandliability. Theultimateaimistobeaone-stopsolutionforbothpropertyandcasualtyinsurance,aswellasotherspeciality insurance.

AstheregionaroundSingaporecontinuestogrow,especiallywithChina’sOBORstrategy,theinsuranceindustrycansupportthegrowthanddevelopmentbycreatingrelevantriskmanagementsolutionsthatcanpavethewayforbroaderrangeofcorporateandinvestorstoparticipateinthisgrowth.

World of Tomorrow – Digitisation: Are Insurers Ready?

Withincreasingmodernisationofprocesses,weseeinsurerstakinggrowinginterestandtremendousmovesinthespaceoftechnologyanddigitisation,seekingtoimproveboththeefficiencyandeffectivenessofprocessesandenhancethecustomerexperience.Thiscouldbeintheareasofsimplifyingreportingprocedures,dataanalyticsrequiredforthepricingstrategiesorenhancingtheclient experience.

The introduction of International Financial ReportingStandards(IFRS)17fortheaccountingof insurance contracts is also anticipated to create significantcostanddisruptiontotheexistingprocesses of insurers. While insurers are still workingtodevelopfullvisibilityonIFRS17implementationcome2021,theonethingforcertainisthatasignificantamountofpreparationandchangewillberequiredbyinsurerstotheirreportingmethodsandsystemstoallowforIFRS17reporting,whichwouldtakeplaceoverthenextfewyears.

Digitisationinvolvesheftycosts,andthisisnotaidedbytheexpiredPICscheme.Anenhanceddeduction/allowancefordigitisationcostinrelationtoregulatoryimplementationsuchas IFRS17wouldbeawelcomedinitiative.ThisistoensureSingaporeremainstheleadinginsurancefinancialcentrethataddressestheupcomingdigital upsurge.

22 Budget Commentary 2018

Carbon Tax

2018hasbeendesignatedastheYearofClimateAction.AsapartytotheParisclimateagreementandtomakeSingaporeamoreliveableandsustainablecity,theGovernmentwilltakeactionstoaddressclimatechangeasamatterofpriority.AnessentialpillaroftheGovernment’sactionswillbetointroduceacarbontax.Thisshouldnotcomeasasurpriseastheplantoimposecarbontaxwasalreadyannouncedduringlastyear’sBudget.

Thecarbontaxrateof$5pertCO2eofemissionsisquitelowcomparedtoothercountrieswhichintroducedcarbontaxratesgenerallyrangingfrom$10to$20pertCO2eofemissions.Thatsaid,thisiswithoutfactoringinexemptionsthatareavailableinothercountrieswhichcouldreducetheeffectivecarbonprices.

Withaninitiallowcarbontaxrate,theGovernmenthopestomanageindustryplayers’concernsaboutcostcompetitiveness.Inthemeantime,theGovernmentcanevaluatetheimpactofcarbontaxonemissionsvis-a-vistheimpactoncompanies’costcompetitivenesstoallowittoadjustthecarbontaxratetoanappropriateleveltoachieveSingapore’semissiontargetswhilemaintainingcompetitiveness.

Giventhatthepowerandelectricitysuppliersarelikelytolooktopassthecostsofthetaxontoconsumers,itisexpectedthattheimpactofcarbontaxwillbeonexportswheretheincreasedcostswillrendertheSingaporeexporterlesscompetitive.

Ifthepowerandelectricitysuppliersdopassoncarbontaxcoststodomesticwholesalersandretailers,eachhousehold’smonthlytotalelectricityandgasexpenseswillincrease.Toprovidesomerelief,theGovernmentwilloffereligibleHousingDevelopmentBoard(HDB)householdsadditionalU-Saverebateof$20peryear,from2019to2021.

Tosupportcompanies,includingSMEsandpowergenerationcompanies,fundswillbesetasidethroughschemesliketheProductivityGrant(EnergyEfficiency)andtheEnergyEfficiencyFundtosupportprojectsthatachievesignificantemissionsreductions.Itisexpectedthattherespectivegovernmentagencies(e.g.theEconomicDevelopmentBoard,EnergyMarketAuthority,etc)willevaluateprojectsvigorously.Wehopethatthisdoesnotmeanaburdensomeapplicationandapprovalprocessthatisdisproportionatetothebenefitsofthesupporttobegiven.

Snapshot

• 2019to2023:thecarbontaxwillbeimposedat$5pertonneofcarbondioxide-equivalent(tCO2e)ofemissions(firstpaymentwillbein2020,basedonemissionsin2019)

• Thecarbontaxratewillbereviewedby2023withtheexpectationthatitwillriseto$10–$15per tCO2eofemissionsby2030

• Applicabletoallsectorswithoutexemptiontoachieveatransparentcarbonpriceacrosstheeconomyandefficientadministrationofthenewcarbontaxsystem

• Applicableonfacilitiesproducing25,000tCO2e ormoreofemissionsinayear.Thismeanscarbontaxwillbeleviedonmajoremitters,whichaccountforabout80%ofSingapore’semissions.

• Nocarbontaxonpetrol,dieselandcompressednaturalgas(CNG),astheseproductsarealreadysubjecttoexciseduties.

• Carbontaxwilltaketheformofafixed-pricecredits-based(FPCB)mechanism.Thismeanstaxablefacilitieswillhavetopaythetaxbypurchasingandsurrenderingthenumberofcarboncreditscorrespondingtotheiremissions.Inotherwords,taxablefacilitieshavetobuycreditsissuedbytheNationalEnvironmentAgency(NEA)at$5pertCO2eofemissionsinorder to produce.

23Budget Commentary 2018

TheMinistryofTradeandIndustry(MTI)andMinistryoftheEnvironmentandWaterResources(MEWR)willsharemoredetailsoftheschemesatalaterdate.

Singaporehassoughttosimplifytheoperationofcarbontaxwhichshouldhelptomanagecompliancecosts.

Productivity Grant (Energy Efficiency)TheProductivityGrant(EnergyEfficiency),orPG(EE),encouragesownersandoperatorsofnewandexistingindustrialfacilitiestoinvestinenergyefficientequipmentortechnologies.Qualifyingcostsincludemanpower,consultancy,equipmentandmaterialscosts.

Energy Efficiency FundTheEnergyEfficiencyFund(E2F)supportscompaniestoundertake(i)Energyassessments;(ii)Energyefficientdesignofnewfacilities;and(iii)Energyefficiencyinvestments.Qualifyingcostsincludemanpower,consultancy,equipmentandmaterialscosts,andotherlogisticaloverheads.

However,astheGovernmenthascarvedoutpetrol,dieselandcompressednaturalgas(CNG),complexcalculationsmayberequiredbytheproducingcompanies.Itremainstobeseenwhetheracarbontaxof$5pertCO2eofemissionswouldbesufficienttospuraseriesofdevelopmentsinthesustainableenergyandclean technology space.

24 Budget Commentary 2018

Stamp Duty

Buyer’s Stamp Duty

Before20February2018,effectively,Buyer’sStampDuty(BSD)rateof3%waspayableontheacquisitionofrealproperty,residentialorotherwise.

From20February2018,thetopmarginalBSDrateforacquiringresidentialpropertyisraisedfrom3%to4%andappliestothevalueoftheresidentialpropertythatexceeds$1million.BSDfornon-residentialpropertiesremainthesame.

TheoldandnewBSDratesareasfollows:

TransitionalprovisionappliesforcaseswhereanOptionto Purchase (OTP) has been granted to potential buyers onorbefore19February2018.Forsuchcases,thepreviousBSDrateappliesiftheOTPisexercisedwithinthreeweeksoftheBudget2018announcement(i.e.onorbefore12March2018)ortheOTPvalidityperiod,whicheveristheearlier.

TheincreaseinthetopmarginalBSDratespecificallyfortransactionsinvolvingresidentialpropertiesshouldbeviewedasapartoftheGovernment’sinitiativetowardsamoreprogressivetaxsystemratherthanapropertycoolingmeasure.Thatsaid,thiscouldhaveanimpactonsmallinvestorslookingtobuyresidentialpropertiesforrentalincome,especiallywhenrentalyieldhasalreadybeen on the decline in recent years.

BSD rates

Tiers on or before19 February 2018 Tiers on or after 20 February 2018

All properties Residential properties(Revised)

Non-residential properties(No Change)

1% First $180,000 First $180,000 First $180,000

2% Next$180,000 Next$180,000 Next$180,000

3% Amountexceeding$360,000 Next$640,000(Revised) Amountexceeding$360,000

4%(New) Notapplicable Amountexceeding$1,000,000(New)

Notapplicable

Additional Conveyance Duty TheincreaseinthetopmarginalrateoftheBSDwillhaveanimpactonAdditionalConveyanceDuty(ACD),whichappliestoaqualifyingacquisitionordisposalofequityinterestinaproperty-holdingentitythatownsprimarilyresidentialpropertiesinSingapore.IntroducedinMarch2017,ACDisintendedtoalignthestampdutyratebetweenadirectacquisitionanddisposalofresidentialpropertyandanindirectacquisitionordisposalofresidentialpropertyviaaninterestinarelevantpropertyholdingentity.

Before20February2018,theACDrateforbuyerswaseffectively18%,comprising(effectively)3%BSDandAdditionalBuyer’sStampDutyof15%.WiththeincreaseinthetopBSDrateforresidentialproperties,ACDforbuyerswillcorrespondinglyincreaseto19%.

Source: Press Release issued on 19 February 2018 by the Ministry of Finance entitled “Buyer’s Stamp Duty (BSD) Rate to be Raised, on the Value of Residential Property in Excess of $1 Million”.

25Budget Commentary 2018

Foreign Worker Levy

PlannedForeignWorkerLevyincreasesintheMarineShipyardandProcesssectorswillbedeferredforanother year.

Deliveredinthecontextofa$9.6billionsurplus,Budget2018broughtmainlygoodnewsformostSingaporeans:

• Therewillbenochangestothepersonalincometaxrates.Ourhighestmarginalincometaxrateof22%remainscompetitiveacrosstheregion,andglobally;and

• Therewillbenonewwealthorcapitalgainstaxes(howeverthesewerespecificallymentioned,soperhapsweshouldcontinueto‘watchthisspace’).

EvenasidefromtheintroductionofGSTonimportedservicesfrom2020andtheincreaseintheGSTratefrom7%to9%(latestby2025),theremaybefurtherconcernsaroundtherisingcostoflivingforsome:

• TheconcessionaryForeignDomesticWorkerLevywillremainat$60permonth,howeverforthosewhodonotqualify,theregularmonthlyLevywillincreasefrom$265permonthto$300(orto$450forsecond/subsequenthelpers).ThiswilltakeeffectfromApril2019;

• Introductionofthecarbontaxin2019isexpectedtoincrease the cost of electricity and gas by around 1% fortheaveragehousehold;and

• Excisedutieswillincreaseby10%acrossalltobaccoproducts.

Theimpactofthesechangesonlower-incomehouseholdsshouldbelessenedbytargetedmeasuressuchas:

• AwardingadditionalGSTVouchersandU-SaveVouchers;

• TheServiceandConservancyChargesrebatewillbeextendedforanotheryear;

• ProximityHousingGrantswillhelpSingaporeansbuyresaleHDBsclosetotheirparents;and

• Aone-timeSGBonus“hongbao”ofupto$300foreverySingaporeanagedover21.

Singaporeanswillalsobenefitfrom:

• ThehouseholdincomeeligibilitycriteriaforEdusaveMeritBursaries,andamounts,willberevisedtoincreasesupportforstudentsfromlowerincomefamilies;

• TheexistingWorkTrialschemewillbeupgradedtoCareerTrial,tohelpjobseekersaccessnewcareers;

• TheTechSkillsAcceleratorprogrammeswillbescaled-uptoimproveemployabilityintheinformationandcommunicationstechnologysector;

• TheWageCreditScheme,whichco-fundswageincreasesforSingaporeanemployeesuptoagrossmonthlywageof$4,000,willbeextendeduntil2020;and

• The250%incometaxreliefforqualifyingcharitabledonationswillbeextendeduntil31December2021.

Overall,Budget2018shouldbeconsideredpositiveforSingaporeans,whilstpreparingforasustainablefuture.

Personal front

26 Budget Commentary 2018

Ifyouwouldliketodiscussanyoftheissuesraised,pleasegetintouchwithyourusualPwCcontactoranyoftheindividualslistedhere:

Sunil AgarwalTechnology,Media&Telecommunicationsunil.agarwal@sg.pwc.com+6582188320

Allison CheungInternational Taxallison.cheung@sg.pwc.com+6582188350

Paul CorneliusEnergy,Utilities&Miningpaul.cornelius@sg.pwc.com+6596335834

Brendan EganInsurance brendan.m.egan@sg.pwc.com+6596274720

Andrew FairfoullTransfer Pricingandrew.fairfoull@sg.pwc.com+6596207417

Abhijit GhoshHealthcare&Pharmaceutical,IndiaDeskabhijit.ghosh@sg.pwc.com+6582230698

Anuj KagalwalaFinancialServices,Asset&WealthManagementanuj.kagalwala@sg.pwc.com+6596710613

Paul LauFinancialServicespaul.st.lau@sg.pwc.com+6562363733

Peter Le HurayInternationalTaxServicespeter.g.le.huray@sg.pwc.com+6597877782

Jun IgarashiTransfer Pricing jun.igarashi@sg.pwc.com+6596273842

Lennon LeeTreasury,Consumer&Retail,ChinaDesklennon.kl.lee@sg.pwc.com+6598000848

Lim Hwee SengMergers&Acquisitionshwee.seng.lim@sg.pwc.com+6597587049

Indirect Tax (Goods and Services Tax)

Koh Soo How soo.how.koh@sg.pwc.com +6596236091

Corporate TaxTax Leader

Chris Woo chris.woo@sg.pwc.com +6591180811

International Assignment Services

Sakaya Johns Rani sakaya.johns.rani@sg.pwc.com+6590888347

Margaret Duongmargaret.duong@sg.pwc.com+6597238238

Worldtrade Management Services (Customs and International Trade)

Frank Debetsfrank.debets@sg.pwc.com+6597507745

Legal Services

LegalservicesareprovidedbyCamfordLawCorporation.CamfordLawCorporationispartofthenetworkofmemberfirmsofPricewaterhouseCoopersInternationalLimited,eachofwhichisaseparateandindependent legal entity.

Natarajannatarajan.s@camfordlaw.com+6565973339

Joanna Tengjoanna.teng@camfordlaw.com+6565973331

Lim Maan HueyFinancialServices,Treasurymaan.huey.lim@sg.pwc.com+6597340718

Florence Loh Consumer&Retailflorence.ch.loh@sg.pwc.com+6598159327

Ketan Madia International Tax ketan.madia@sg.pwc.com+6597258453

Elaine NgTransport & Logisticselaine.ng@sg.pwc.com+6582231126

Rose SimFinancialServicesrose.sim@sg.pwc.com+6596239817

Tan Ching NeTechnology,Media&Telecommunication,Research&Development,Digital Tax Leaderching.ne.tan@sg.pwc.com+6596229826

Tan Hui Cheng FinancialServiceshui.cheng.tan@sg.pwc.com+6583385182

Tan Tay LekConglomerates&IndustrialProductstay.lek.tan@sg.pwc.com+6591792725

Teo Wee HweeRealEstate&Hospitalitywee.hwee.teo@sg.pwc.com+6562367618

Falgun ThakkarTransfer Pricing falgun.d.thakkar@sg.pwc.com+6596347984

Sarah WongMergers&Acquisitionssarah.wc.wong@sg.pwc.com+6598176501

Contacts

27Budget Commentary 2018

Goods and Services Tax

• IntroducereversechargeonservicesimportedbyGST-exemptentitiesandnon-GSTregisteredentitieswitheffectfrom1January2020.

• OverseasvendorsprovidingdigitalserviceshavetoregisterforGSTwitheffectfrom1January2020iftheirglobalturnoverismorethan$1millionannuallyandtheironlinesalestoSingaporeconsumersexceed$100,000.

• IncreaseGSTratefrom7%to9%sometimebetween2021and2025.

Corporate tax

• EnhancecorporatetaxrebateforYearofAssessment(YA)2018to40%oftaxpayable,cappedat$15,000.TherebatewillbeextendedtoYA2019at20%oftaxpayable,cappedat$10,000.

• AdjustPartialTaxExemptionandStart-upTaxExemptionschemes.• Grant250%taxdeductionforqualifyingexpenditureonqualifyingresearchanddevelopment(R&D)projectsperformedinSingapore.

• Grant200%taxdeductionsforthefirst$100,000ofqualifyingIPregistrationcostsandqualifyingIP licensing costs.

• IncreaseexpenditurecapforclaimsnotrequiringpriorapprovalfromIESingaporeorSingaporeTourismBoardto$150,000perYAundertheDoubleTaxDeductionforInternationalisationscheme.

• ExtendtheBusinessandInstitutionsofPublicCharactersPartnershipSchemeandthe250%taxdeductionforqualifyingdonationsto31December2021.

• ExtendtheInvestmentAllowanceschemetoincludequalifyinginvestmentsinsubmarinecablesystemslandinginSingapore.

• Enhanceinitiativestostrengthenthecompetitivenessofthefinancialsector,including:– ExtendtheSection13XEnhanced-TierFundschemetoallformsoffundvehicles.– IntroduceataxframeworkforSingaporeVariableCapitalCompanies.– ExtendthetaxtransparencytreatmentcurrentlygiventoSingapore-listedRealEstateInvestmentTruststoSingapore-listedRealEstateInvestmentTrustsExchange-TradedFunds.

– Extendtaxincentiveschemesto31December2023:QDS,ApprovedSpecialPurposeVehicleforassetsecuritisation,FinancialSectorIncentive,InsuranceBusinessDevelopment-InsuranceBrokingBusinessandtaxexemptionforprimarydealerstradinginSingaporeGovernmentSecurities.

– ExtendtheSection14ItaxdeductionforbanksandqualifyingfinancecompaniestoYA2024orYA2025dependingontheentity’sfinancialyearend.

– Rationalisewithholdingtaxexemptionsforthefinancialsector.

Other changes

• IncreasethetopmarginalBuyer’sStampDutyrateto4%,applicableonthevalueofresidentialpropertiesexceeding$1million.

• Introducecarbontaxof$5pertonneofgreenhousegasemissionsfrom2019to2023.

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers Singapore Pte Ltd, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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Proposals to enhance Singapore’s economy

Budget Commentary 2018

Key Tax Highlights

www.pwc.com/sg/budget-2018