Accountants and industry watchers at Deloitte Singapore have laid out their wish list for the Budget 2018 which will be delivered by Finance Minister Heng Swee Keat on February 19.
On top of Deloitte's recommendation is the staggering of the increase in Goods and Services Tax (GST) to ease the impact it might have on households.
Deloitte Singapore and Southeast Asia Tax Partner and Indirect Tax Leader Richard Mackender said there are projections that the GST rate is likely to be raised by one to two percent with a potential ceiling at 10 percent.
Mackender said it would really help lessen the financial burden of Singapore households if the GST rate hike is staggered one percent at a time.
"In addition, the Government may wish to consider expanding the scope of GST zero-rating to cover certain prescribed basic necessities, such as children's clothing, basic foodstuffs such as rice, vegetables, certain prescription medicines to the elderly, so that such items are exempted from GST," he said.
With such move complementing the permanent GST voucher scheme, Mackender argued that it would help to ease the financial impact on the lower income group.
There is also the proposal to enhance the tax regime for small- and medium-sized enterprises (SMEs).
Deloitte Singapore Regional Managing Partner for Tax Low Hwee Chua said 2018 marks the first year where expenditure on activities on the innovation value-chain would no longer be supported by the Productivity and Innovation Credit (PIC) scheme.
To recall, the Government has expressed its stronger intent to concentrate its resources on targetted initiatives. And as the Government sees that not all firms will be able to survive the restructuring of Singapore's economy into the one that is value-creating, Low said businesses should not be deprived of support.
Low said it would be best if Budget 2018 will tackle the simplification of the SMEs' tax system as a cost reduction scheme.
"Whilst the benefits of an efficient tax system should accrue to all companies, it may be argued that SMEs stand to benefit the most, as, all things being equal, SMEs generally face a disproportionately higher tax compliance cost vis-à-vis bigger companies (as a percentage of sales)," Low explained.
Meanwhile, another thing in Deloitte's Budget 2018 wish list is for Singapore to keep up with international tax developments in light of the recent tax reform signed by US President Donald Trump.
Tax Partner Liew Li Mei said with Singapore's already low corporate tax rate of 17 percent, it may not have room for further reduction.
"As such, we reiterate our call for a holistic examination on whether a more sustainable tax regime can be achieved by moving from 'picking winners' to a reduced corporate income tax rate for the overall economy," she said.
Inclusivity is also one of the recommendations of Deloitte Singapore. More so, Deloitte wants Budget 2018 to equip Singaporeans with the right tools as the city-state take a step closer to the "future economy".