SINGAPORE – More than half of companies are hoping for tax relief in the upcoming Singapore Budget amid a sluggish economic climate, said the Singapore Business Federation (SBF).
About 55 per cent of both large companies and small and medium-sized enterprises (SMEs) rank tax rate reduction and rebates as the top two priorities for the Budget, according to the SBF's annual National Business Survey released Tuesday (14 January).
Deputy Prime Minister and Finance Minister Heng Swee Keat is scheduled to deliver Singapore’s 2020 Budget Statement on 18 February.
In his New Year 2020 message, Prime Minister Lee Hsien Loong said that the global economic slowdown has affected Singapore despite the country having avoided a recession this year.
"Budget requests this year are very much back to basics and reflect current needs of businesses," the SBF said.
In other areas that respondents are hoping for more support, about 49 per cent of them want easier access to information and resources from government agencies, 47 per cent want incentives for industry-related training and 47 per cent want incentives for corporate ventures.
Sentiment about Singapore’s economic outlook continues to decline, with almost half of all businesses expecting 2020 to be a more challenging year than 2019.
While more Singapore companies embraced transformation and internationalisation last year, sentiment remained soft over economic uncertainties amid the US-China trade dispute, the survey said.
More than 1,000 companies took part in the survey, which was conducted from 26 August to 25 October last year. About 87 per cent of the respondents are SMEs and the remainder are large companies with annual sales of over S$100 million or employ over 200 people.
Three top challenges
For businesses, the three top challenges this year are manpower costs (67 per cent), business competition (62 per cent) and finding new or better ways to grow revenue (56 per cent).
The SBF noted that manpower issues continue to adversely affect businesses. Many of them are struggling with rising labour costs due to tighter government policies on hiring foreigners and stiff competition to secure the best local talent. Four in 10 businesses said they face challenges in attracting or retaining younger workers.
To reduce the dependence on new hires or training, 19 per cent of companies said they are turning to automation and technology.
Despite the challenging economic environment, Singapore businesses continue to expand overseas.
Eight in 10 businesses have an overseas presence, according to the survey. The proportion of SMEs with international operations rose to 78 per cent in 2019 from 68 per cent in 2018. About 93 per cent of large companies have expanded overseas last year, compared with 90 per cent in 2018.
It is critical for companies in Singapore to expand overseas in order to sustain their growth given the small domestic market, said SBF chairman Teo Siong Seng.
"It is encouraging that our SMEs are extending their global footprints more aggressively despite the economic uncertainty that shrouded 2019," Teo said. “The growing e-commerce and digital economy provide our businesses with new opportunities as they can expand into new markets with little to no physical presence.”