/24-7PressRelease/ - HONG KONG, May 22, 2008 - As global economic uncertainties mount, Singapore has developed a comprehensive tax exemption scheme to boost the fortunes of start-up companies in the city state.
Hong Kong-based financial consultancy Zetland reports on its website that starting in 2009 a newly incorporated company that meets specified conditions can claim a full tax exemption on the first 100,000 Singapore dollars (US$73,000) of normal chargeable income. This is in addition to the 50 percent tax exemption given on the next S$200,000, the report says.
Starting in 2008, a partial tax exemption will also be given to companies on income of up to S$300,000.
The moves are an apparent attempt to stimulate economic growth amid concern of a global economic slowdown.
Prime Minister Lee Hsien Loong highlighted economic challenges recently but said he remained upbeat about Singapore's economic prospects. Lee added he was confident the city-state was on track to achieve 4 to 6 percent growth this year.
¡°The economy will slow down in the next few quarters, and the slowdown could last into next year," Lee said, however.
He cited the rising cost of living, which was brought about by surging energy and food prices, and problems in the U.S. economy as reasons for concern.
Inflation in the city-state accelerated to a 26-year high of 6.7 percent in March. The central bank expects inflation to hit the upper-end of a 4.5-5.5 percent range this year, although some economists said inflation for the year could average 6 percent.
The United States is probably in a recession and the Singapore economy will be more severely affected if the turmoil in global financial markets worsens, Singapore's prime minister said.
"Dark storm clouds have gathered ... A U.S. recession has probably already started," Lee said.
While the construction, marine engineering and port sectors "would be okay", he said, other sectors such as finance, tourism and information technology could be "seriously affected" by the impending U.S. recession.
The report is one of many offered each month by Zetland Financial Group on its website.
Zetland provides business and financial consultancy internationally and in the Asia region with an emphasis on operations in China.
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