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Changes in technology have revolutionised
the mode of business transactions. Internet, for
example, is set to change the way companies conduct
their businesses. The value of goods and services
currently being traded on the Internet is estimated
at US$46 billion. It is expected to grow to between
US$200-300 billion by the year 2002.
Internet electronic commerce
holds many opportunities for businesses. The financial
and logistics sectors will gain from the increased
international trading generated by this new mode
of transaction. The media and communications sectors,
including advertising, information technology,
and content creation will also benefit from this
development. Local companies can take advantage
of this new medium to expand their businesses
to the region and beyond through direct marketing
and other new strategies. Foreign companies can
also use Singapore as a test-bed for broadband
applications and a launch pad for its Internet
trading activities in the region. The uniqueness
of Asia calls for a hub that can service this
time zone, and meet its distribution and consumer
needs.
Singapore is well placed to become
an electronic commerce hub. To tap this growing
market, I have decided to grant a concessionary
tax rate of 10 per cent on offshore trading income
derived from transactions made over the Internet
under the Approved Cyber Trader Scheme for companies
that qualify. Approved companies will also enjoy
an Investment Allowance of up to 50 per cent of
the cost of qualifying new fixed investments,
and full or partial exemption of withholding tax
on qualifying payments. These incentives will
be granted for a period of 5 years with effect
from Year of Assessment 1999. The scheme will
be administered by the Trade Development Board. |
