SINGAPORE — As Budget 2025 approaches, businesses across Singapore are urgently calling for significant simplifications to tax processes, hoping to alleviate the considerable compliance and administrative burdens they currently face.

This growing consensus within the business community has been formally articulated in a wish list submitted to the Ministry of Finance and the Inland Revenue Authority of Singapore (IRAS) by the Singapore International Chamber of Commerce (SICC). These proposed changes, set to be discussed further before the budget is announced in February, could transform the landscape for both large corporations and small-medium enterprises (SMEs).

Streamlining Processes is Key

Mr. Victor Mills, SICC's interim CEO, shared his insights with The Straits Times on the top priorities for businesses. One major area of concern is the Refundable Investment Credit (RIC). While businesses welcomed its introduction in Budget 2024, many feel it falls short in compensating for advantages they previously enjoyed. SICC is advocating for a more streamlined RIC mechanism that allows flexibility in utilizing tax credits among affiliated companies and offers businesses the choice between cash grants and RIC.

Moreover, businesses are asking the government to rethink the labor-intensive surveys and audits to ease the burden of compliance. By leveraging data from existing incentives, like the Global Trader Programme, the administrative load could be significantly reduced.

Easing Grant and Incentive Requirements

Tax incentives and grants also appear on the wish list, particularly for foreign mid-cap firms that are exempt from new global tax regulations requiring that large multinationals contribute a minimum tax where they operate. SICC suggests that simplifying the application processes for these entities could attract more foreign investment and stimulate business growth.

Key suggestions include clearer eligibility criteria and less complicated compliance rules post-approval. Making these concessions could greatly assist businesses in focusing their efforts on growth rather than grappling with red tape.

Reducing Administrative Burdens: A Call for Action

With the recent rollout of new e-invoicing rules, business leaders believe it's time to refine the Assisted Compliance Assurance Programme (ACAP). Launched to help businesses establish a robust GST accounting framework, the program has supported over 1,000 businesses since its inception. However, many feel that a reevaluation is necessary to modernize its processes in light of today's technological advancements.

Mr. Mills proposed limiting the categories of supplies exempt from the InvoiceNow system, which is intended to streamline operations. Special extensions should also be provided for businesses whose ACAP renewal coincides with the new e-invoicing requirements.

SMEs Seek Global Opportunity Through Non-Tax Initiatives

In addition to tax-related requests, the SICC emphasizes the importance of expanding support for SMEs through the Overseas Market Immersion Programme. This initiative is designed to assist small businesses aiming for international expansion by reskilling local talent without prior overseas experience. The program offers substantial financial support, covering a significant percentage of salaries and overseas living expenses, which could help SMEs expose their employees to global markets.

As Budget 2025 draws nearer, the pressure mounts for the Singapore government to heed these requests from the business community. The outcome could either bolster the resilience and competitiveness of local companies or leave them grappling with outdated and cumbersome tax processes. Will the government respond to these urgent calls, or will businesses be left in the lurch? Stay tuned!