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Singapore considers modifying incentives as G20 leaders back tax deal

by Mike Robinson

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© Reuters. FILEPHOTO: Singapore’s Prime minister Lee Hsien Loong, and U.S. vice president Kamala Harir (not pictured) attend a joint news conference held in Singapore on August 23rd 2021. REUTERS/Evelyn Hockstein/Pool

SINGAPORE (Reuters – Singapore is considering how to change its tax incentives following the endorsement by leaders from 20 of the largest economies in the world, a global minimum income tax that would prevent big businesses hiding earnings in tax havens.

Singapore’s minimum tax rate will have an impact on how it attracts investment. Tax incentives are “one of many major tools” that the city-state’s Economic Development Board uses, Lee Hsien Loong stated in comments to local media Monday.

He stated, “We will need to see how these will be modified.”

To prevent major corporations from losing their profits to offshore entities, they will have to pay a minimum of 15% wherever they do business starting in 2023.

Singapore, which is low in taxes and home to several multinationals including Alphabet’s Google, Microsoft and Facebook, has a corporate tax rate of 17%. However, incentives and other schemes can reduce that effective rate.

“I see there will be more competition for us. Lee added that they will handle it with grace.

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