Singapore surveyed as country with least burdening taxes
Singapore surveyed as country with least burdening taxes
Singapore, 24 September 2008 - According to the Grant Thornton International Business Report (IBR), 97 per cent of privately held businesses (PHBs) in Singapore say that tax issues are a significant factor for businesses deciding where to establish an operating base overseas; this is significantly higher than the global average of 77 per cent. Thailand topped the chart with all PHBs surveyed stating tax issue as a determining factor.
Nearly half of all respondents globally (48 per cent) considered tax incentives, such as a tax free period of five years, and low rates of tax on business profits, as influential factors in their choice of location when considering establishing an operating base overseas.
Comparably, 59 per cent of PHBs in Singapore considered having a tax free period of five years the most influential determinant. Tax incentives attract investments from businesses looking to expand amidst this inflationary period of rising costs and weakening economic sentiments, providing a natural hedge against economic downturns.
PHBs in Singapore also favoured low tax rate on business profits (43 per cent) and a stable tax regime (31 per cent).
The IBR showed that 40 per cent of PHBs in Singapore state that there are no burdening taxes in the country, topping the chart with the highest number of recipients surveyed. Despite current global market conditions, this shows that PHBs in Singapore have a positive view of the tax regime and remain confident of the growth momentum in the country.
On the global front, the IBR showed that the most burdensome domestic taxes for privately held businesses are taxes on business profits and employment taxes. Almost a quarter of all respondents (24 per cent) identified these aspects as being the most burdensome, followed by personal income tax (16 per cent) and indirect taxes (12 per cent).
Kon Yin Tong, a partner with Foo Kon Tan Grant Thornton, the Singapore member firm within Grant Thornton International, said: “Against a background of tightening market conditions, the results provide a comprehensive picture of opinion on tax issues in this pivotal sector for economic growth. Fundamentally, taxation issues are a major concern for PHBs in Singapore looking for expansion. They seek meaningful tax incentives to invest in new markets."
He continued, "Governments are under pressure to compete with each other as more and more countries cut their business tax rates to support existing businesses and entice others to relocate."
