Question No 13 of Notice Paper No. 84 of 2009
Name and Constituency of Member of Parliament
Mdm Halimah Yacob, Member for Jurong GRC.
Question
To ask the Minister for Trade and Industry whether his Ministry could give an assessment of the possible impact on Singapore arising from the US proposals to change its tax regime which would affect US companies operating here.
Answer
1.The proposed changes to the US tax regime, if implemented, is likely to result in an increased tax burden for US companies with overseas operations. But these changes will affect US companies’ operations not only in Singapore, but also in other countries.
2.The exact nature of the tax changes is still being worked out in the US, and MTI, MOF and EDB are monitoring the developments closely. The proposals have led to a fair amount of debate within the US, and US companies have been active in giving feedback to the administration regarding the proposed tax changes. The eventual impact on US companies operating in Singapore will depend on whether the proposals pass through, and if so, in what form. The US companies themselves are also watching closely and studying the potential impact of the proposed changes on their operations.
3.We are also in close touch with US companies in Singapore and relevant industry groups to hear their feedback. This is important as the impact of the proposed changes will likely vary across different industries, and will also depend on the specific situation of each company, including its corporate structure and the kinds of substantive activities it conducts in Singapore.
4.We are concerned, but not unduly so. A competitive corporate tax regime is an important strength for Singapore but is not the only one. Businessmen, tax professionals, and industry analysts have repeatedly stressed that multinationals choose Singapore for a variety of reasons beyond tax considerations - including market access, cost effectiveness, collaboration opportunities, infrastructure, regional connectivity, access to talent, and political and economic stability. As a business location, Singapore offers a superior quality of living, world-class infrastructure, conducive business environment, and a flexible, high-skilled and open labor market. Global companies locate here because Singapore is their entry point into the growing Asian market. Singapore has been able to attract companies from different industries and geographies to establish substantive activities here in manufacturing, research and development, supply chain management and control tower functions. DB continues to see a healthy pipeline of new projects and expansion of existing operations in Singapore from companies from all over the world, including the US.
5.The Government will continue to monitor tax developments in the US. We will also continue to improve Singapore’s attractiveness as a business hub and a gateway to the region for both US and non-US companies.