Robert Meyer
Managing Director
Halcyon Investment Corporation Pte Ltd

Singapore has a unique opportunity in the wake of the global credit crunch. As governments around the world face unmanageable debt burdens and out-of-control budget deficits, they will have increase taxes. It is likely that the increased tax burden will fall on the politically most underrepresented constituents of such economies: consumers and SME businesses.

For the 2010 budget, I would like to see Singapore get ahead of its competitors by rebalancing its Inland Revenue strategy with a view to favouring genuine economic value creation over windfall profits.

• Shift the tax burden away from income generated by recurring economic activity and towards one-off capital gains or windfalls. This could be achieved by: 1) Lifting minimum taxable income to S$40,000 per year; 2) Setting a minimum taxable income for businesses at S$250,000 per year 3) Re-introducing 30 per cent capital gains tax on profits arising out of investments in property and marketable securities generated within 36 and 12 months respectively.

• Set incentives for businesses to invest in R&D by allowing quadruple tax deduction for R&D expenses in preferred sectors.

• Set incentives for businesses to employ strategic growth options: 1) Allow double tax deduction for M&A expenses; 2) Waive stamp duties for assets being transferred in the process of business restructuring/reorganisation arising out of M&A; 3) Allow full tax deductibility of interest expenses arising out of acquisition debt.

Besides setting the stage for local businesses to become more profitable and grow in a more aggressive manner, these changes would also help to pour some cold water on the property market that has seen property prices, once again, move substantially ahead of their intrinsic values on the back of speculative buying. At the end of the day, Singapore needs to remain a competitive place to do business, and that implies an affordable cost of living for Singaporeans and expatriates alike.

Tan Chong Huat
Managing Partner
KhattarWong

My wish list for Budget 2010 includes considering bridging the current gap between the individual and corporate income tax rates (which currently has a 3 percentage point difference) by rationalizing the highest marginal tax rate with the prevailing corporate tax rate. To address the widening income gap, I suggest expanding the zero percent tax bracket from $20,000 to a higher amount to help individuals at the lowest income bracket.

For businesses to stay competitive, the partial exemption rule could be extended to include sole proprietorships and partnerships to help with rising costs and encourage the growth of entrepreneurship. Also, extending the exemption of foreign income rule indefinitely will go some way towards increasing Singapore's appeal as an investment destination.

These suggestions would ideally work in tandem with the ESC's recommendations to create a Singaporean economy that is accessible to the individual, vibrant for corporations and attractive to foreign companies.

In line with our ambition to be a financial hub with a vibrant capital market, it is suggested that costs related to financing activities be included in the proposed list of deductible costs, such as legal fees and stamp duties, management, underwriting, security, fiscal and trustee fees etc.