SINGAPORE – The government will consider releasing more information and estimates on the impact of changes to international tax rules on Singapore to allow for a more informed debate, Finance Minister Lawrence Wong said.
He pointed out that the rules of the Base Erosion and Profit Shifting or BEPS 2.0 initiative are still being refined and discussed globally, pointing out that while the initiative is to come into effect by 2023, it is not set in stone “because many details are still being worked out”.
The fact that the issues are still under discussion is one of the reasons he is reluctant to release figures at this stage, Mr Wong told parliament on Wednesday (March 2).
It was in response to Opposition Leader Pritam Singh’s request for projections the government is working with on the impact of BEPS 2.0, an agreement reached by 137 jurisdictions to reform international corporate tax rules.
BEPS 2.0 has two pillars: the first aims to reallocate the profits of the most profitable multinational enterprises (MNEs) from where the activities are carried out to where the consumers are, while the second introduces an effective tax rate overall minimum of 15% for MNEs. groups with an annual worldwide turnover of at least €750 million (S$1.1 billion).
In response, the Minister acknowledged an earlier point by Mr Singh about releasing more information for a more informed debate, and said: “We will go back and consider providing a range of estimates. on the impact of BEPS 2.0 could be for both Pillar One and Pillar Two.”
Mr Wong suggested that the initiative would likely result in a neutral “increase” in tax revenue, and that the authorities “will hopefully provide some figures to help everyone get a better idea of what this could be. to be”.
However, any additional revenue will most likely have to be reinvested to ensure Singapore continues to attract its fair share of investment and is unlikely to go towards the republic’s social spending needs, he said. underline.
The reality is that competition for investment will not go away just because of BEPS 2.0, and will in fact intensify in other non-tax areas, which Singapore will therefore need to fund and prepare resources for, Wong said. .
“So while there’s a plus to BEPS 2.0, I’m actually not convinced that additional revenue will help us with our social spending needs, and especially not our health spending needs, which will continue to increase. increase very sharply.
Watch Finance Minister Lawrence Wong’s full speech to Parliament: