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G8 Awarded LOI for the Installation of the Largest Next Generation 65MW Floating Solar system at BUI Hydro Dam in West Africa

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  • The Bui Dam is a hydroelectric project in Ghana, built on the Black Volta River at the Bui Gorge
  • G8 entered LOI with BUI Power Authority Ghana to install a full turnkey 65MW system at BUI Hydro Dam facility


SINGAPORE – Media OutReach – 22 February 2022 – G8 Subsea, Singapore-based technology company with global expertise in offshore and marine renewable energy projects today, announced that the Company has been awarded with an agreement by BUI Power Authority Ghana to install a full turnkey 65MW system at BUI Hydro Dam facility.


The Group will install the GPM-65 floating solar system- featuring G8’s new generation flotation and high output Photovoltaic modules to increase power production capacity of Hydro Power Plants with an advanced power management system. This is to ensure efficient power and load transfer between solar and hydro-power.

The GPM-65 Solar-Hydro System will occupy approximately 350,000m2 of water space at Black Volta River close to the Hydro dam vicinity. The Solar-Hydro system will be incorporated with G8’s marine engineered mooring and flotation technology to cater to different depth variations of the dam throughout the year. The system will feature an advanced power management system with an optional ESS (Energy Storage System) to integrate the function of solar power and hydropower generation.

G8’s management, together with local joint venture partner KW Renewables, conducted a site assessment of the hydro dam facility to initiate logistics and project preparation with BUI operations team. The system is part of an extension to a present 5MW system and is targeted to be commissioned by third quarter 2023.

G8’s unique expertise in marine construction and floating solar engineering will provide a high-quality solution to BUI with the latest technology to integrate Solar & Hydropower to increase renewable energy production in Africa.

Emerging Enterprise- G8

G8 was recently awarded the Emerging Enterprise Award 2021 in Singapore, is committed to capitalise on the robust demand for renewable energy technologies. Making few progresses recently. The company’s ambition for potential NASDAQ listing in 2022 had recently entered a US10million investment and technology collaboration deal with 3DOM of Japan valuing G8 at USD200mil. This enables the Group to set a leadership position in sustainable energy storage combined with wind and solar globally. Together with 3DOM as a technology partner, the Group will set its sights on playing a key role in the battle against climate change with complete green energy generation and storage solutions.

Demand is growing faster than in any other region worldwide, supported by expanding populations, robust economic growth prospects, and significant potential due to the low market penetration of renewables 4 . Global consulting agency Deloitte predicts that the aggregate installed capacity of floating photovoltaics (FPVs) will reach 5.2GWp globally by the end of 2022, representing US$4–5 billion in spending.

G8 has nearly 3 gigawatts (GW) of renewable energy and sub-sea transmission projects under development in Asia. Its footprint spans Indonesia, South Korea, India, and soon, Africa.

#G8 #G8Subsea

The issuer is solely responsible for the content of this announcement.

Cheng & Cheng Taxation Reveals 10 quick facts about the Hong Kong Taxation System

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HONG KONG SAR – Media OutReach – 22 February 2022 – Hong Kong is famous for its simple taxation system and low tax rate, so would most probably be the first set-up to consider when investors enter the Asian market (particularly the Mainland China market). However, without a better understanding of the benefits, investors may not realise just how attractive Hong Kong is. Cheng & Cheng Taxation Services Limited (Cheng & Cheng Taxation) provides 10 quick facts about the taxation system investors need to know before deciding to move to Hong Kong.

 

Benefits of setting up a Hong Kong intermediate holding company:

 

1.      Hong Kong does not have withholding tax in most circumstances

 

Most countries impose withholding tax when money is transferred out of the country. This tax could be even higher than the local corporate income tax rates. However, Hong Kong is the complete opposite. In general, there is no withholding tax on dividend and interest, or on services, while only a low withholding tax will be imposed on royalties. When a Hong Kong company has to pay royalties to an overseas entity, it has to withhold tax on behalf of the overseas entity. The general tax rate is between 2.475% and 4.95%, but under some circumstances the tax rate could be as high as 16.5%.

 

The fact that Hong Kong does not charge withholding tax on dividend and interest makes it an ideal place for setting up an intermediate holding company.

 

2.      Hong Kong does not tax on capital gains

 

Capital gains tax planning is common in Hong Kong, because there are huge differences between tax rates on long-term capital gains and short-term trading gains. While short-term trading gains are subject to normal tax rates of 16.5%, long-term capital gains are subject to a tax rate of 0%.

 

There is no clear definition that distinguishes between long-term and short-term investments. There are six “badges of trade” tests that are generally used to judge the difference, which leaves room for tax planning opportunities before the investment decision is made. Investments in securities and immovable properties for long-term investment purposes are also eligible for the non-taxable capital gain claim.

 

From a group structure perspective, the non-taxable capital gain claim provides more flexibility in the exit of an underlying investment or subsidiary. This adds to the benefits of setting up an intermediate holding company in Hong Kong.

 

3.      Hong Kong does not tax on dividend income

 

Dividend income from both Hong Kong and foreign investments are non-taxable under Hong Kong Profits Tax. Hong Kong–sourced dividend income is exempted under Section 26 of the Inland Revenue Ordinance to avoid double taxation on the same profits, while foreign-sourced income is generally non-taxable in Hong Kong.

 

Fund distribution income is generally exempt from Hong Kong Profits Tax under the same logic.

 

4.      Hong Kong has already entered into DTAs with 45 tax jurisdictions

 

Hong Kong has been rapidly expanding its Comprehensive Double Taxation Agreement (DTA) network in recent years to facilitate the use of Hong Kong entities to carry out cross-border business and investment. The number of DTAs has already reached 45. Please refer to the following website for a detailed list of DTA partners [https://henrykwongtax.com/home/hong-kong-tax-treaty-network/].

 

The expanded DTA network will effectively reduce the overseas withholding tax when a Hong Kong company sets up an overseas subsidiary or does business with overseas business partners.

 

It has become a global practice that a taxpayer has to apply for a Certificate of Resident Status in order to utilise the tax benefits under a DTA. As an international city, located in the central part of Asia and being so close to Mainland China, Hong Kong is in a good position to attract multinational corporations to build up economic substance (including personnel and an office) here. For more details on the requirements for obtaining Hong Kong tax resident status, please visit the “Tax Residency Certificate Video” section of the following website [https://henrykwongtax.com/home/trc-videos/].

 

Benefits as a trading company:

 

5.      Hong Kong does not have GST or VAT

 

To facilitate the development of the trading industry in Hong Kong, Hong Kong does not impose goods and services tax (GST) or value-added tax (VAT). Only certain specific items, such as like liquor and tobacco, are subject to tax.

 

More pertinently, while digital services tax (DST) has become a global trend, Hong Kong does not currently plan to introduce DST, a fact that will attract corporations working in the digital economy arena.

 

As such, multinational corporations tend to set up a Hong Kong office as their Asian trading hub and sales office. They first sell the products to the Hong Kong group company, which will subsequently sell the products to customers in other Asian countries.

 

6.      Hong Kong does not adopt the worldwide taxation system

 

Unlike many developed countries, Hong Kong adopts a territorial taxation system. Regardless of whether a company is a Hong Kong resident or non-resident, only Hong Kong–sourced profits are subject to Hong Kong Profits Tax, in most circumstances. In other words, if a Hong Kong company carries out its operations outside Hong Kong, it will have the technical basis to pursue an offshore claim, even when the relevant profits are deposited with the bank accounts in Hong Kong.

 

The Inland Revenue Department (the IRD) issues an enquiry letter to taxpayers that pursue an offshore non-taxable claim in Hong Kong to ensure their operations are carried out outside Hong Kong. As such, it is important for taxpayers to plan their inter-company arrangements and operational flow in advance, so as to defend against any challenge by the IRD. Sufficient trade transaction documents should be in place as the burden of proof is on the taxpayer.

 

On the other hand, under the Common Reporting Standard (CRS) and Automatic Exchange of Information (AEOI), taxpayers that pursue an offshore claim in Hong Kong should be aware of their foreign tax risk. Double non-taxation is not encouraged under the OECD’s base erosion and profit shifting (BEPS) framework. Nevertheless, an offshore claim is one of the effective ways of avoiding double taxation issues, particularly with countries without a DTA with Hong Kong.

 

7.      Hong Kong is well known for its low corporate income tax rate

 

The corporate income tax rate in Hong Kong is 16.5%, which is among the lowest across the globe. For the first HK$2 million of profits, the tax rate is reduced by half, to 8.25%. The low tax rate has attracted a lot of Mainland China enterprises and multinational corporations to set up companies and operations in Hong Kong.

 

Taxpayers in certain specified industries (such as insurance, shipping and corporate treasury centres) can enjoy a special tax rate of 8.25%, while taxpayers carrying out R&D activities in Hong Kong can enjoy an enhanced tax deduction of 200% or 300%.  Please visit the following website for more details on the tax benefits: https://henrykwongtax.com/newsletter/inland-revenue-ordinance-section-15f-double-taxation-risk-on-mnc-with-research-development-rd-functions-in-hong-kong/

 

By setting up operations in Hong Kong to enjoy the low tax rate, the group / company could certainly benefit from a lower group effective tax rate to reduce the tax burden.

 

Employer obligations:

 

8.      Hong Kong employers have no obligation to withhold tax for employees

 

Unlike many other tax jurisdictions, Hong Kong employers in general do not have an obligation to withhold tax on behalf of their employees when the remuneration is paid. The employees are under their own obligation to settle their Hong Kong Salaries Tax position.

 

A withholding tax obligation only arises when an employee will permanently leave Hong Kong. In such a case, the employer has to notify the IRD at least one month before the expected date of departure. The employer is also required to temporarily withhold payment of salaries until receipt of the “letter of release” from the IRD.

 

9.      Employers have to report salaries paid to employees, even when they work outside Hong Kong

 

Every April, employers are required to file an Employer’s Return (BIR56A and IR56B) with the IRD to report the remuneration paid to its directors and staff, regardless of whether the work was carried out in or outside Hong Kong. It is a common misconception that filing the Employer’s Return is not required if the employees work outside Hong Kong.

 

The mismatch between salary expenses incurred by a corporation and the Employer’s Return is one of the catalysts that will trigger a field audit and investigation by the IRD. As such, employers should also report remuneration paid to both Hong Kong and non-Hong Kong employees. Employees are under their own obligation to lodge a non-taxable offshore claim to the IRD if they work outside Hong Kong.

 

Having said that, it is worthwhile for the employers to make a note in the IR56B that the employee did not perform his or her job duties in Hong Kong. Meanwhile, all employment contracts should be well structured to avoid any challenge by the IRD.

 

Transfer pricing rule:

 

10.  Hong Kong already has its own transfer pricing rule

 

Large corporations in Hong Kong are now required to file transfer pricing documentation in Hong Kong, which comprises Master File, Local File and Country-by-Country (CbC) reporting. Since the implementation of the transfer pricing rule on 13 July 2018, we are also seeing an increased trend by the IRD to carry out transfer pricing audits on taxpayers.

 

Hong Kong follows the international threshold for CbC reporting. Multinational groups with consolidated revenue of EUR750 million (HK$6.8 billion) are required to file a CbC notification and report in Hong Kong. An important point to highlight is that, even though a multinational group has already submitted a CbC report in another tax jurisdiction, they must submit their CbC notification in Hong Kong, even when there is an information exchange mechanism.

 

Below is the specific threshold for transfer pricing Master File and Local File in Hong Kong:

 

A

Criteria (A): Based on size of business (any two out of three of the below)

Threshold

(i)

Total annual revenue

≥ HK$400 million

(ii)

Total assets

≥ HK$300 million

(iii)

Employees

≥ 100

 

B

Criteria (B): Based on related party transactions (any one out of four of the below)

Threshold (HK$)

(i)

Transfers of properties (excludes financial assets / intangibles)

≥ $220 million

(ii)

Transactions in financial assets

≥ $110 million

(iii)

Transfers of intangibles

≥ $110 million

(iv)

Any other transactions (e.g. service income / royalty income)

≥ $44 million

 

Taxpayers above the threshold are required to prepare a Master File and Local File on an annual basis.

 

For more details of Hong Kong and Mainland China tax news, please visit Cheng & Cheng Taxation’s  website at https://henrykwongtax.com.

About Cheng & Cheng Limited

Cheng & Cheng Limited, one of the member firms of Cheng & Cheng Group, is an accounting firm established in Hong Kong with over 250 staff located in Hong Kong and Mainland China. We are the principal auditor for 10 listed corporations in Hong Kong and the tax advisor for over 80. We specialise in providing Hong Kong, Mainland China and international tax advisory services, as well as transfer pricing services to international clients. If you would like to know more about Hong Kong’s taxation system, or seek specific tax advice from our tax experts, please do not hesitate to contact us by email (henry.kwong@chengtax.com.hk) or phone (3962 0114).

Legal Disclaimer:

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received, or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

The issuer is solely responsible for the content of this announcement.

Herbalife Nutrition Appoints Dr. Bum Jo Oh as its Newest Nutrition Advisory Board Member in Korea

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SEOUL, SOUTH KOREA – Media OutReach – 22 February 2022 – Herbalife Nutrition (NYSE:HLF), a premier global nutrition company, announced the appointment of Dr. Bum Jo Oh as its newest Nutrition Advisory Board (NAB) member in Korea.

Family medicine expert Dr. Bum Jo Oh joins Herbalife Nutrition Advisory Board

 

An expert in Family Medicine, Dr. Oh is the Chief of Family Medicine at SMG-SNU Boramae Medical Center as well as Associate Professor of the Seoul National University Hospital.

 

“With his extensive experience in comprehensive health care for people of all ages, together with a profound understanding of the importance of nutrition for public health, Dr. Oh is a valuable addition to our team of experts in nutrition, science and health,” said Dr. Kent Bradley, Chief Health and Nutrition Officer at Herbalife Nutrition. “We look forward to working with him to inspire people to adopt healthy nutrition and lifestyle habits, and help address health-related megatrends such as obesity and rapidly aging populations.”

 

Dr. Oh graduated from Seoul National University Medical School with a Master’s in Public Health. He has co-authored numerous articles in medical publications and journals, including “Associations of Diet Quality and Sleep Quality with Obesity” (Nutrients, 2021) and “Physical Activity Patterns and Their Associated Factors Measured by Global Physical Activity Questionnaire Survey among Korean” (The Korean Journal of Sports Medicine, 2020).

 

The Herbalife Nutrition Advisory Board (NAB) comprises leading experts from around the world in nutrition, science, and health. The NAB helps educate and train the Company’s Independent Members on leading a healthy, active lifestyle and getting proper nutrition. Herbalife Nutrition’s NABs in Asia Pacific currently include Dr. Zhen-Yu Chen (Hong Kong), Dr. Chin-Kun Wang (Taiwan), and Dr. Korakod Panich (Thailand).

About Herbalife Nutrition

Herbalife Nutrition is a global company that has been changing people’s lives with great nutrition products and a business opportunity for its independent distributors since 1980. The Company offers high-quality, science-backed products, sold in over 90 countries by entrepreneurial distributors who provide one-on-one coaching and a supportive community that inspires their customers to embrace a healthier, more active lifestyle. Through the Company’s global campaign to eradicate hunger, Herbalife Nutrition is also committed to bringing nutrition and education to communities worldwide.

For more information on nutrition, visit Herbalife.com

#HerbalifeNutrition

CPA Australia donates fresh vegetables and 20,000 food packs to Food Angel to help the vulnerable

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HONG KONG SAR – Media OutReach – 22 February 2022 – With the aggressive resurgence of the pandemic sweeping through Hong Kong – the vulnerable community continues to suffer from the drastic increase of prices in fresh vegetable and other essential food items. In response to this, CPA Australia Greater China Divisional Council, Past Presidents and its committee members in Hong Kong announces a joint effort in donating fresh vegetables and more than 20,000 pre-cooked meal boxes to the elderly, the low-income families and the vulnerable community residing in the Sham Shui Po district with the help of Food Angel.

 

CPA Australia expects to feed thousands of people with fresh vegetables and hot nutritious food for the next couple of days

 

Since the Chinese New Year, Hong Kong has suffered from a shortage of fresh food supply which resulted in soaring grocery prices. This intensified the financial burden of many low-income families with many confessing that they have been living solely on plain rice.

 

Concerned with the struggles of the vulnerable community, CPA Australia Divisional Council, Past Presidents and Committee members hoped to make use of this opportunity to support Food Angel in providing more fresh vegetables and pre-cooked meal boxes for those in needs. This donation contributed by this group of CPA Australia members is expected to feed thousands of people with fresh vegetables and hot nutritious food for the next couple of days in this cold weather.

 

One of CPA Australia’s greatest focuses is to make a positive impact to the community we live in and we have always advocated the importance of formulating precise allocation and appropriate dissemination when it comes to community support. Through this community outreach, CPA Australia hopes that Hong Kong will recover and recuperate from the 5th wave very soon.

About CPA Australia

CPA Australia is one of the largest professional accounting bodies in the world, with more than 168,000 members in over 100 countries and regions, including more than 21,000 members in Greater China. CPA Australia has been operating in Hong Kong since 1955 and opened our Hong Kong office in 1989. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au

#CPAAustralia

Homes for Attapeu Flood Victims Remain Incomplete

A housing construction project for victims of the 2018 dam collapse in Attapeu Province has yet to be completed.

Singapore based LENE Bird’s Nest announces its new branding direction

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SINGAPORE – Media OutReach – 22 February 2022 – Known for its healthy bird’s nest product, LENE has adopted a new take on its brand. Hinging on the Chinese culture of swallows being commonly associated with femininity, grace & beauty, LENE is adopting a more oriental approach. Aligning with the swallows being symbolic of new beginnings and a good omen of something good to happen, LENE’s rebrand and new premium gift boxing hopes to enable its brand to reach new heights.

Bird’s nest is the partially dissolved nest of a native small Southeast Asian bird –– swiftlet. These salivary secretion of nest swiftlets are a highly-prized health supplement rich in epidermal growth factor and glycoproteins, leaving you with smooth, glowing and healthy skin. LENE’s sugar-free double-boiled bird’s nests are harvested for human consumption, especially sought after in Chinese culture due to their rarity, health benefits and rich flavour.

 

Focusing on sustainable harvesting, LENE’s bird’s nests are derived from house nests, allowing better control over optimal conditions for swiftlets while ensuring ethical harvesting methods. LENE relies on our very own bird’s nests farm in Malaysia and trustworthy suppliers, establishing a brand grounded in sustainable harvesting known for its quality bird’s nest.

 

Cleaned by hand using filtered water absent of toxins and chemicals (eg. bleach), LENE places trust in our quality suppliers who are able to provide 100% pure, premium-grade bird’s nests for one’s wellness that our brand stands for. Further, using monk fruit extract (luo han guo) for a natural zero-calorie sweetener, LENE uses its antioxidants called mogrosides, for the natural sweetening of our bird’s nest. Its low glycaemic index gives rise to its diabetic-friendly nature, making it the ideal option for all.

 

As a firm believer of the Chinese philosophy “beauty begins from within”, LENE aims to combine the concept of modern wellness with wisdom stemming from rich Chinese heritage (eating well to exude outward beauty). From the beginning selection of the finest ingredients to the final stages of sealing and bottling, we ensure the best quality is reflected at every step of our production process. Much thought goes into our new design and revamped final aesthetic appearance of the brand package such that a harmonious blend of both tradition and modernity is achieved, striving to appeal to all ages.

 

Using sustainable sources for bird’s nest ingredients with no added sugar, LENE is keenly differentiated from many other similar companies, priding ourselves on bringing you nothing less than the best. Using only whole bird’s nests (yan zan) for enhanced flavour, the unabridged quality is clearly seen through the fine, intact strands of the bird’s nests.

 

Making efforts in improving its premium packaging, LENE’s Japanese-imported bottle now has a gold logo which aptly matches the gold cap of the bottle, making it an ideal choice for practical yet beautiful decoration around the house. The matte-coating paper-lined cardboard boxes with traditional designs also underscore Chinese beliefs and values, aligning with LENE’s overall rebranding efforts.

About us

Launched in 2021, LENE offers freshly cooked bird’s nest sourced sustainably and made from pure and highest quality ingredients providing only the best nutrition. LENE aims to bring more people on board to the journey of beauty and better health.

#LENE

The issuer is solely responsible for the content of this announcement.

PolyU scholar receives Clair C. Patterson Award for outstanding achievements in environmental geochemistry

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HONG KONG SAR – Media OutReach – 22 February 2022 – Professor Xiang-dong LI, Dean of Faculty of Construction and Environment, The Hong Kong Polytechnic University (PolyU), was honoured with the Clair C. Patterson Award 2022 in recognition of his innovative and dynamic work in environmental geochemistry, including research in the fields of regional contamination, urban air PM2.5 pollution, and the origin and dissemination of antimicrobial resistance.

 

Professor Xiang-dong Li, Dean of Faculty of Construction and Environment, The Hong Kong Polytechnic University, was honoured with the Clair C. Patterson Award 2022 in recognition of his innovative and dynamic work in environmental geochemistry.

The Clair C. Patterson Award is presented to only one recipient annually by the Geochemical Society for an innovative breakthrough in environmental geochemistry of fundamental significance within the last decade, particularly in service to society.

 

Professor Li said, “I am very proud to be presented with this prestigious award. In addition to the international recognition, the award indeed acknowledges the dedication of the research team here at PolyU in making an impact in the communities we serve. By addressing real-world environmental problems, we hope our research will bring about practical benefits for Hong Kong and the rest of the world.”

 

Professor Li’s current research covers a wide range of topics including emissions, transport and environmental fate of metal and organic pollutants, contaminated soil remediation, and the environmental loadings and implications of emerging pharmaceutical-related contaminants in surface environments.

 

Over the years, he has published more than 250 papers, mostly in leading international journals. He has also been the principal investigator of numerous research projects funded by the Hong Kong Research Grants Council (RGC) and the National Natural Science Foundation of China (NSFC).

 

Professor Li is also the Director of the Research Institute for Sustainable Urban Development (RISUD), Chair Professor of Environmental Science and Technology, and Ko Jan Ming Professor in Sustainable Urban Development at PolyU.

 

Established in 1955, the Geochemical Society is a non-profit scientific organisation that aims to encourage the application of chemistry to the solution of geological and cosmochemical problems as well as to promote understanding of geochemistry through various programmes. Membership is international and diverse in background, and includes thousands of scientists and engineers from around the world.

#TheHongKongPolytechnicUniversity(PolyU)

KPMG’s strategic viewpoints from Singapore Budget 2022

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SINGAPORE – Media OutReach – 22 February 2022 – Following Singapore’s “Charting Our New Way Forward Together” Budget announcement on 18 February 2022, KPMG has released a Singapore Budget 2022: Capturing opportunities at a new dawn publication, entailing our views on how Singapore will help businesses, residents and workers look forward to a prosperous and sustainable future.

Capturing opportunities at a new dawn

How will it prepare Singapore to harness growth in an economic sunrise?

FOREWORD

Optimism is in the air as most countries adjust their economic recovery strategies to live with COVID-19. Having weathered the crisis better than most – supported by high vaccination rates – the time is ripe for Singapore to position itself for the upturn and capture new opportunities for growth. Building on its core strengths and riding on new trends, Singapore has the potential to become a formidable regional leader in environmental, social and governance (ESG) initiatives and a global hub for top businesses and talent. Budget 2022 lays pivotal steps towards these aspirations. Not only does it chart a fairer post-pandemic social compact supported by progressive taxation policies, but it also outlines a vision of Singapore as a “bright green spark” for the world and a forerunner in innovation.

At the same time, fast-developing challenges remain. Amid a renewed purpose towards sustainability, countries are recognising that they will need to deliver on their environmental commitments with urgency. Businesses, too, are facing the heat from stakeholders to be more transparent, consistent, and accountable on their ESG targets. Singapore has made some bold climate-related commitments in Budget 2022. The most notable would be the acceleration of the net-zero emissions timeline to 2050.

Other challenges on the horizon include the new global tax rules that could kick in next year and growing concerns over inflation and the costs of living. Coupled with the pressure for growth and expansion, businesses could be squeezed on all fronts as they look to survive and thrive. Against this backdrop, Singapore should capitalise on its strengths and reputation as a hub for business and innovation. In the wake of a pandemic that has accelerated the move to a digital future, this means supporting businesses in their recovery and digitalisation efforts, while ensuring that R&D and innovation ecosystems here are being cultivated steadily. Singapore will also have to be cognizant of how its various tax and non-tax measures can attract large multinationals and fast-growing enterprises to anchor their operations here.

In the times ahead, enterprises will need to build greater agility and resilience amid unpredictability. Businesses will have to keep prioritising the development of digital capabilities in emerging areas and attract highly nimble talent who are able to transform disruption into growth.

Today, Singapore can stand proud as it holds the recipe for building lasting companies and societies that will make a positive mark on the world. It will be a pivotal year and Budget 2022 sets the stage towards an economic horizon filled with boundless possibilities.

Ong Pang Thye

Managing Partner, KPMG in Singapore

A NEW WAY FORWARD

 

Evoking how the Singapore spirit shone through the difficult years of the COVID-19 pandemic, Budget 2022 is positioned as a “new way forward together”. It includes tangible measures that businesses, residents and workers can look forward to improve their prosperity in the years ahead – and more fundamentally sets a comprehensive path towards national economic recovery and sustainable growth, aided by progressive policies on the taxation of income, consumption, and wealth. Here is KPMG’s analysis of three key themes:

 

Singapore as a key driver of ESG in the region

 

Budget 2022 details an ambitious vision for Singapore to help lead the world’s transition to a net-zero carbon future. Bringing additional risks of extreme weather events, climate change represents an existential threat to Singapore’s way of life and requires it to take decisive steps to overcome its lack of renewable energy resources.

Building on its commitment to halve peak emissions by 2050, as well as last year’s launch of the Singapore Green Plan 2030, Singapore will now seek to bring forward its achievement of net-zero emissions through a higher carbon price. A total of $35 billion in green bonds was announced to fund public sector infrastructure projects. The Budget also emphasises the government’s desire to minimise car use (including by phasing out internal combustion engines by 2040), incentivise the adoption of electric vehicles and boost the public transport network.

Introduced in 2019, Singapore’s carbon tax will be gradually increased from its current $5 per tonne of emissions to $25 per tonne by 2024; $45 per tonne by 2026; and between $50 and $80 per tonne by 2030. While these increases are higher than the rates many were expecting, they should not come as a major surprise to businesses given recent global trends, the greater urgency to address climate change-related issues and the general drive towards more sustainable solutions. Industries that are most affected can take some comfort from the fact that the first rise will not be effective until 2024, and that a “transition framework” is being drawn up which will provide allowances based on efficiency standards and decarbonisation targets. There will also be a support package for households to offset rising electricity prices.

Yet rather than intended as a revenue raising measure, the rise in Singapore’s carbon tax is positioned as part of a decisive economic restructuring towards decarbonisation. Budget 2022 makes an impassioned pitch for Singapore to become Asia’s go-to location for green finance, carbon services and an expert in areas such as sustainable aviation, marine fuels and tourism. Besides an increase in carbon taxes, there were also a range of green initiatives and incentives announced for Singapore to establish itself as a “green hub”. In building a more sustainable city, Singapore will also have to look at how it can create good jobs for Singaporeans in the green economy, together with the reskilling and upskilling of employees.

Overall, Singapore’s commitment to building a sustainable future has come across very strongly. The combination of increasing taxes and incentives should be an effective tool to encourage businesses to move towards greener solutions sooner rather than later.

Singapore as a choice destination for businesses

 

A second major theme of Budget 2022 is Singapore’s determination to be a strategic launchpad for businesses around the world that are looking to expand across Asia. Hence, even as new global tax rules come to the fore in the next 1 to 2 years, the country should consider the balance of tax and non-tax measures that are key in attracting multinational enterprises (MNEs) to continue locating their offices and headquarters in Singapore.

Singapore has a well-established reputation of a leading smart city. Budget 2022 has reaffirmed the government’s commitment to support innovation and R&D – public investments in R&D is set at about 1 per cent of GDP – and the city-state is home to a thriving innovation ecosystem. In addition, the extension of the Approved Royalties Incentive (ARI) to 2028 will continue to encourage companies to leverage on state-of-the-art technologies to capture growth opportunities.

Singapore was also among the world’s first few nations to establish a standalone 5G network. Certainly, the pandemic has turbocharged the trends towards digital acceleration in all sectors of the economy. Budget 2022 has highlighted the need to keep upgrading broadband infrastructure and to invest in future technologies such as 6G. The ability of businesses to prosper and continue creating jobs and opportunities for their workforce, will require them to embrace this transition. As such, the Budget contains an additional $200 million to improve digital capabilities in businesses and workforces. It also commits to keep upgrading broadband infrastructure, invest in future technologies such as 6G – and to pursue new use cases in areas such as virtual and augmented reality and robotics that can generate innovation across the economy.

As we look at the current trend of Metaverse and the virtual world, we are seeing an exponential need for data streaming, high velocity and low latency data. New technology, such as 5G and in the future 6G, will drive the push for more creative ways to integrate immersive experiences within our real world and adjacent “worlds”. These provide opportunities for businesses to engage with consumers differently and market their products. To best capitalise on these emerging technologies, there will be a strong need to drive new ways of working, while encouraging lateral thinkers and problem solvers.

Budget 2022 also aims to anchor Singapore’s traditional strengths. The enhancement of the existing tax incentive schemes for funds managed by Singapore-based fund managers will further cement Singapore’s reputation as an asset management hub. In addition, the extension and rationalisation of various existing withholding tax exemption schemes will further boost Singapore’s position as an international hub for financial services, mediation and arbitration, maritime and aircraft leasing.

Singapore as a magnet for top talent across industries

 

Thirdly, Budget 2022 contains a comprehensive plan to position Singapore as a global centre of talent. The pandemic has reduced worker and student mobility around the world, leaving nations facing skills shortages. However, as Singapore postures for economic growth, the key policy priority identified in the Budget is achieving a complementarity between luring overseas talent and investing in the local workforce. The Government has correctly recognised the need to expand educational opportunities for Singaporeans through initiatives such as SkillsFuture. It is also committed to the special reskilling challenges facing midcareer workers given their vulnerability to digital disruption and the transformation of local Institutes of Higher Learning.

At the same time, one of Singapore’s hallmarks is its ability to combine local and foreign workforces into diverse, high-performing teams. Changes in Budget 2022 slightly recalibrating eligibility to Employment Pass and S Pass Holders, and tightening the Dependency Ratio Ceiling, are designed to protect mid-level Singaporeans while not interfering with the nation’s ability to bring in professionals to address higher end skills shortages and to welcome talent from around the world. The slight increase in the top marginal personal tax rate to 24 per cent is also unlikely to adversely affect Singapore’s ability to attract top talent.

CONCLUSION

Singapore has the potential to shoot for an economic sunrise, and in doing so, also ascend to be a force for positive influence in the region and globally towards sustainability. But this is contingent on the country and its companies being clear in identifying what they want to be known for in the years ahead. In a world without borders, global competitiveness will also not just be about Singapore, but about ASEAN and the world as a whole. In laying a strong foundation for the country in the areas of sustainability, digitalisation and talent, Budget 2022 is a clear roadmap on the way forward and beyond.

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