PwC Budget wish list throws spotlight on financial relief
By LYNETTE KHOO
PRICEWATERHOUSECOOPERS (PwC) has unveiled its wish list for the 2009 Budget, putting the spotlight on an immediate need for financial relief for businesses and individuals.
While the government will be hard-pressed to please everyone, a quick-fix rescue package rather than structural or long-term measures is needed to help ease tension in the rising storm, says Paula Eastwood, head of corporate tax at PwC Services.
'Businesses need cash more now than ever before, and Singapore could differentiate itself by introducing bold fiscal measures to boost investments and increase market liquidity,' she adds.
To boost businesses, Ms Eastwood suggests a 'tax amnesty' window for the remittance of foreign-sourced income to Singapore, lifting the $100,000 limit on the amount of current-year losses that can be carried back to offset against the prior year's taxable income, and allowing the carry-back to even earlier years.
'Add an efficient cash refund process and this will be a potent and equitable way of getting relief to otherwise sound, but currently ailing businesses,' Ms Eastwood says.
She says that another quick way to free up cash is to postpone tax payments without imposing late-payment penalties in objection cases where the tax position is unresolved. Currently, tax is collected upfront and remains out of the taxpayer's reach while the tax position is being finalised.
To lighten the load on individuals, Ms Eastwood suggests bringing down the top income tax rate from 20 to 18 per cent to give higher earners more disposable income to spend.
An income tax rebate for the larger population could boost morale and short-term spending power, she says. In addition, a scheme to defer payment of income tax by those who have been retrenched and are actively seeking work would help alleviate short-term financial worries.
Stimulating research and development investments and 'green' initiatives are also on PwC's Budget wish list this year. Ms Eastwood notes that sustaining efforts to support R&D and innovation remain important, even as companies wait for the economic storm to blow over.
She suggests that the government allow taxpayers to claim tax deductions for at least 100 per cent of expenditure on R&D outsourced overseas in relation to a new business, offer a concessionary tax rate on income from specified intellectual property management initiatives and provide 'green' tax incentives and concessions to encourage the adoption of environmentally friendly practices.
This article was first published in The Business Times on January 06, 2009.
By LYNETTE KHOO
PRICEWATERHOUSECOOPERS (PwC) has unveiled its wish list for the 2009 Budget, putting the spotlight on an immediate need for financial relief for businesses and individuals.
While the government will be hard-pressed to please everyone, a quick-fix rescue package rather than structural or long-term measures is needed to help ease tension in the rising storm, says Paula Eastwood, head of corporate tax at PwC Services.
'Businesses need cash more now than ever before, and Singapore could differentiate itself by introducing bold fiscal measures to boost investments and increase market liquidity,' she adds.
To boost businesses, Ms Eastwood suggests a 'tax amnesty' window for the remittance of foreign-sourced income to Singapore, lifting the $100,000 limit on the amount of current-year losses that can be carried back to offset against the prior year's taxable income, and allowing the carry-back to even earlier years.
'Add an efficient cash refund process and this will be a potent and equitable way of getting relief to otherwise sound, but currently ailing businesses,' Ms Eastwood says.
She says that another quick way to free up cash is to postpone tax payments without imposing late-payment penalties in objection cases where the tax position is unresolved. Currently, tax is collected upfront and remains out of the taxpayer's reach while the tax position is being finalised.
To lighten the load on individuals, Ms Eastwood suggests bringing down the top income tax rate from 20 to 18 per cent to give higher earners more disposable income to spend.
An income tax rebate for the larger population could boost morale and short-term spending power, she says. In addition, a scheme to defer payment of income tax by those who have been retrenched and are actively seeking work would help alleviate short-term financial worries.
Stimulating research and development investments and 'green' initiatives are also on PwC's Budget wish list this year. Ms Eastwood notes that sustaining efforts to support R&D and innovation remain important, even as companies wait for the economic storm to blow over.
She suggests that the government allow taxpayers to claim tax deductions for at least 100 per cent of expenditure on R&D outsourced overseas in relation to a new business, offer a concessionary tax rate on income from specified intellectual property management initiatives and provide 'green' tax incentives and concessions to encourage the adoption of environmentally friendly practices.
This article was first published in The Business Times on January 06, 2009.
