In his Budget 2023 speech today (14 Feb), Deputy Prime Minister and Finance Minister Lawrence Wong announced measures to improve Singapore’s productivity and ensure better jobs.
These better jobs, in turn, will raise Singaporeans’ salaries and help them to overcome rises in the cost of living and inflation, Mr Wong said.
Source: MCI Singapore on YouTube
Dubbed the Enterprise Innovation Scheme, it’ll offer tax reduction enhancements of up to 400% of qualifying expenditures.
Currently, qualifying expenditures are eligible for up to 250% tax reduction.
These are the five activities that qualify for enhanced tax reduction:
These qualifying expenditures will be capped at S$400,000 for each activity.
The sole exception is innovation carried out with polytechnics and ITE.
For these, the cap will be S$50,000 instead.
“Businesses that make full use of the scheme could enjoy tax savings of nearly 70% of their investment,” Mr Wong said.
With this, Singapore companies will be able to accelerate their R&D efforts.
Smaller companies yet to turn in a profit may also qualify for a non-taxable cash payout.
This is so that they can benefit as well without needing to have high taxable income.
They can choose to convert 20% of their total qualifying expenditure across all five categories per year of assessment into a cash payout of up to S$20,000.
They can thus defray up to S$100,000 of qualifying expenditure.
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Featured image adapted from Wayne Chan on Unsplash.
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