Singapore to expand 2024 spending, enforce global minimum tax
By Xinghui Kok and Joe Brock
SINGAPORE (Reuters) — (This Feb. 16 story has been corrected to say S$6 billion top up to fund helping with sales tax instead of S$6 billion in vouchers in paragraph 9, and clarifies that the S$1 billion over five years is for developing industry and talent in AI in paragraph 14)
Singapore's Finance Minister Lawrence Wong announced on Friday a «significant adjustment» to the tax system with implementation of the 15% global minimum corporate tax rate spearheaded by the Organisation for Economic Cooperation and Development (OECD).
The prime minister-in-waiting also expanded government spending to help households battle inflationary pressures in the city-state and to grow the economy and jobs.
Wong told parliament the tax adjustment could lead to a reduction in the tax base as multinational companies re-evaluate their plans and said he did not expect the move to generate revenue gains for Singapore.
OCBC economist Selena Ling called the move «quite sobering» but said the trade-reliant economy had no choice since more countries — key trading and investment source markets — were implementing the OECD's minimum corporate tax rate.
Wong announced an overall small surplus of S$0.8 billion or 0.1% of GDP for fiscal year 2024, «essentially a balanced fiscal position», he said.
The government's medium-term fiscal position was tight but its overall stance was «appropriate as we are providing targeted support», Wong said.
«Our key priority is to ensure a strong, innovative and vibrant economy.»
Support for households in one of the world's most expensive countries would be topped up by another S$1.9 billion ($1.41 billion), while a S$1.3 billion support package would also be introduced for companies,
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