Opening doors to opportunity

In the past years, the Not Ordinarily Resident Scheme has attracted foreign investors to set up regional headquarters in Singapore with key executives based here and taking frequent business trips in the region able to enjoy tax breaks under the time-apportionment (TA) concession. The scheme has been phased out since year of assessment 2020.

We propose that the TA concession be considered for foreign employees and Singaporeans with regional roles who travel regularly in the region for business. The scheme has helped the nation to successfully attract talents, and including Singaporeans will help achieve parity between foreign employees and citizens.

As many companies regularly offer share awards and stock options to attract, retain and rewards employees, the Government could look at attributing gains from share awards and stock options to the period sourced in the relevant country at the time the rights of the shares are acquired.

This basis of taxation provides the opportunity for cross-border employees to sell shares upon eventual acquisition of the rights to pay for tax liability and mitigate cash flow challenges. It is also aligned with international tax practices.

As more companies champion a hybrid working model, home rental and other work-from-home (WFH)-related costs may no longer be considered strictly personal expenses. The Government could consider implementing WFH relief for employees adopting such work arrangements. The Government can also consider providing partial exemption on housing benefits and allowances provided by employers.

In looking to capture new areas of growth, it will be crucial for Singapore to attract talent in sectors such as biomedical sciences, technology, interactive digital media and financial services. This could be challenging amid a talent crunch.

For Singapore to differentiate itself from other countries, it can consider extending the tax exemption for foreign employees working in these sectors to 90 days.

To empower the local workforce with the skills and capabilities needed to cope with evolving business needs, Singapore could place greater focus on mid-career workers looking to pivot into emerging sectors.

We propose that the annual $5,500 cap on Course Fees Relief, which encourages individuals to continuously upgrade their skills and enhance employability, be removed, and full course fee claims be allowed. Unabsorbed claims could also be carried forward to subsequent years. 

As remote work becomes a long-term option for many companies, the Government must do more to ensure there are no tax leakages. As a start, the country may wish to set relevant guidelines for remote working employees based in Singapore to provide more clarity to foreign employers and employees.

The Government could also consider an ASEAN initiative, such as an agreed framework addressing the issues that may arise for companies with remote workers in another country within the region. Such a framework can help address tax issues arising from remote working.

Singapore’s public health system must ensure access to services, information and affordable care. To achieve this, the Government can consider:

• Increasing spending on community health approaches
• Working more closely with practitioners as they adjust business models and pricing in response to the Government’s Healthier SG initiative
• Channelling more funds to healthcare technology research and development
• Encouraging public healthcare providers to incorporate sustainability requirements into public tenders, and passing on cost savings to patients

Singapore should balance importing food with local production to ensure accessibility, affordability and nutritional quality while meeting consumer preferences. Rising food prices may make targeted food aid a necessary stopgap for some low-income households. In the longer term, the Government could consider:

• Continued strategic investment in agritechnology
• Targeted support for development of solutions such as hydroponics, rooftop farming and alternative proteins
• Funding for skills training to help ensure necessary manpower and expertise in new agritech sectors
• Consumer education to reduce food waste and encourage sustainable choices

Supporting low-income workers’ wages in the face of inflation is a priority with many struggling to increase their income or switch careers. This underpins the need for skills-based education for adults. The Government can address this by engaging with employers on wages, linking salaries to skills and supporting career progression through training.

To enhance revenue generation potential, Singapore has been reviewing its tax system, including changes to goods and services tax (GST), as well as personal, property and carbon tax rates. There has also been debate about introducing a wealth tax. Any enhancement of tax revenue should be fair and progressive, keeping the overall tax burden low for most Singaporeans and carefully considering tax hike rates and scope to avoid reducing the country’s competitiveness.