FY2026 MOF Committee of Supply Debate Speech by Senior Minister of State for Finance Mr Jeffrey Siow

A.         STREAMLINING RULES AND REGULATIONS TO EASE COMPLIANCE BURDEN

A1.     Mr Chairman, let me start by addressing Ms Tin Pei Ling’s question on the Government’s efforts to support businesses by streamlining regulatory requirements.

A2.     The Economic Strategy Review (ESR) committees have engaged many business leaders to gather feedback on Singapore’s long-term economic strategy.

a.  Many business leaders, here and abroad, have emphasised the importance of Singapore’s reputation as a well-governed, stable place for doing business. Our clear and consistent rules and laws are a competitive edge, especially in today’s uncertain global economic environment.

A3.     Besides the ESR, I am also part of the Inter-Ministerial Committee on Pro-Enterprise Rules Review chaired by the Deputy Prime Minister, which oversees efforts to improve regulatory efficiency.

A4.     MOF agencies are strongly supporting the Inter-Ministerial Committee’s efforts.

A5.     For instance, Customs is considering extending the validity period of certain licences from three years to five years, so that businesses need not renew them as frequently.

A6. Customs is also shortening the time for businesses to obtain some licences to within 30 working days, so businesses have greater certainty in their planning and operations.

A7. ACRA will consult businesses and the audit community later this year on whether to exempt more small enterprises from having to audit their financial statements.

a.  This will reduce their cost burden and improve cash flow.

A8. While we do want to keep compliance requirements proportionate, some regulations which balance between business and consumer interests require a little bit more careful consideration.

A9. For example, Mr Kenneth Tiong asked if IRAS can review the concession for F&B establishments and hotels to display prices that exclude GST.

A10. The purpose of this concession is to simplify processes for establishments that impose service charges, which includes both F&B establishments and hotels. This is because service charges are variable and may be waived or reduced.

A11. This concession has been in place for the last 30 years, and has become the accepted norm. Making an industry-wide change will require such businesses to incur additional costs, when the industry is facing cost pressures.

A12. Nonetheless, we will review this in the future, to take into account technological improvements as well as business and consumer preferences.

B.         ADDRESSING CONCERNS ON COST OF DOING BUSINESS

B1.     Mr Edward Chia and Mr Shawn Loh suggested that the Government review the frequency of the Progressive Wage Credit Scheme (PWCS) payouts, citing how annual payouts may result in cashflow constraints for smaller businesses.

B2.     MOM annualises the PWCS payouts because the wages of workers in the Progressive Wage Model sectors can vary throughout the year. Smoothening the payout on an annual basis ensures that we provide sufficient, fair and consistent support to companies that are implementing wage increases to uplift our lower-wage workers.  So it’s not a technical issue, it’s a policy issue.

B3.     We recognise that smaller businesses face more cost pressures and cashflow constraints, which is why we have provided the Corporate Income Tax Rebate and Cash Grant to support more companies in this year’s Budget.

C.      FACILITATING TRADE BY REDUCING CROSS-BORDER FRICTION

C1.    Ms Tin Pei Ling asked about the ASEAN Single Window.  And I managed to hear all of her cut before the mic cut her off.

C2.    The ASEAN Single Window enables the exchange of documents for cross-border trade across ASEAN Member States.

C3.    The onboarding of ASEAN Member States to the ASEAN Single Window has reduced paperwork, shortened clearance times, and improved predictability and transparency for traders and exporters. This has facilitated trade by reducing cross-border friction.

C4.    Singapore chairs the Steering Committee for the implementation of the ASEAN Single Window.

C5.    We are now exploring ASEAN Single Window 2.0, to strengthen interoperability and to expand electronic trade-related document exchanges to partners, such as China, Japan, and South Korea.

C6.    This could include adopting standardised technologies that allow more types of electronic documents to be exchanged.

C7.    These improvements to cross-border clearance processes will make it even easier for businesses to use Singapore as a launchpad to grow and expand internationally – in line with recommendations from the Economic Strategy Review.

D.      SUPPORTING DIGITALISATION TO REDUCE COST OF DOING BUSINESS

D1. Mr Saktiandi Supaat and Ms Tin Pei Ling asked how the Government can help businesses catalyse innovation and enhance processes to be more productive.

D2. We encourage businesses to use more technology to increase productivity.

a.  For instance, SMEs that do not have large back-office teams can digitalise processes to reduce paperwork and errors.

b.  A recent study by Deloitte estimated that using digital invoices can save small businesses up to $20 per invoice.

D3. To support this effort, IMDA launched InvoiceNow, Singapore’s e-invoicing network, in 2019.

a.  Today, over 63,000 businesses are on InvoiceNow.

b.  One such business is I Interior Design. By using InvoiceNow, the business can automatically issue invoices and populate accounting records, without having to spend time on manual data entry.

c.  Many businesses and trade associations have given us positive feedback that they were able to reduce invoicing errors using InvoiceNow. 

D4. And for businesses with overseas operations, cross-border B2B transactions will also be easier through InvoiceNow as its underlying e-invoicing standard is internationally accepted.

D5. For these reasons, the Government has been nudging more businesses to use InvoiceNow.

a.  We provide newly incorporated businesses with one year of free InvoiceNow services.

b.  Since 1 November 2025, newly incorporated companies that voluntarily register for the GST are required to transmit invoice data to IRAS via the InvoiceNow network. Such companies have benefited from faster GST audits and refunds. 

D6. As more businesses come onboard InvoiceNow, the network benefits and efficiency gains will only increase further.

a.  So, in consultation with the Singapore Business Federation and other trade associations, we are now ready to take the next step to push for greater adoption of e-invoicing.

D7. We will require all GST-registered businesses to submit digital invoices to IRAS via InvoiceNow by April 2031.

D8. This will bring on 90,000 more businesses to the InvoiceNow network.

D9.  We will do this progressively, prioritising the onboarding of smaller businesses so that we can support them better in their transition.

a.  First, we will make a suite of InvoiceNow-Ready software solutions available to businesses free-of-charge.

b.  Second, we will provide new cash grants to defray the operational costs of adopting InvoiceNow-Ready software: up to $1,000 for smaller companies, and up to $5,000 for larger companies.

D10. More details on the timeline and support provided will be released by IRAS and IMDA.

E.      PERSONAL INCOME TAXES AND TAX CREDIT

E1.     Turning to personal taxes, Mr Saktiandi Supaat asked about reviewing the $20,000 threshold for personal income tax exemptions.

E2.     While the personal income tax exemption threshold has not been changed for some time, this threshold should be seen together with our overall system of tax rates, tax reliefs and rebates that applies to all individuals.

E3.     Under our current system, one in three resident workers do not pay any income tax at all. And among those who do, about 8 in 10 have an effective tax rate of less than 6%.

E4.     So I would like to reassure Mr Saktiandi that we will regularly review our income tax system to ensure that it is progressive and resilient, and that the tax burden is kept low, particularly and especially for the middle- and lower-income.

E5.     Mr Ng Shi Xuan suggested providing tax credits to recognise our NSmen and caregivers.

a.  As Mr Ng has pointed out, we do have various tax reliefs in place to recognise NSmen and caregivers .

b.  To complement the tax reliefs, both NSmen and caregivers are also eligible for cash grants and credits. Cash grants and credits are administratively simpler and more progressive than tax credits which are tied to payable taxes.

c.  For example, we provide up to $18,500 in LifeSG credits and top-ups to CPF and Post-Secondary accounts via the NS HOME Awards for operationally-ready NSmen, and we also have provided one-off NS LifeSG credits in 2022 and 2024.

d.  Caregivers can also apply for the Home Caregiving Grant (HCG) to defray the cost of caregiving.

e.  We will continue to review the support provided to NSmen and caregivers, whether through tax deductions, cash grants, or other means to recognise them for their contributions and sacrifices.

F.          SOVEREIGN WEALTH FUNDS AND STRATEGIC OBJECTIVES

F1. Finally, Mr Victor Lye spoke about strategically leveraging Temasek’s global investments to create more opportunities for Singaporeans.

F2. Temasek’s mandate is to deliver good, sustainable long-term returns. Their returns contribute to the annual Budget via the Net Investment Returns framework.

F3. As a principle, we want Temasek to operate on a commercial basis and to optimise returns. As Mr Lye acknowledges, the Government does not prescribe specific areas of investment or dictate Temasek’s individual investment decisions.

F4. Nonetheless, Temasek is indeed a valuable partner for the Government in our economic growth strategies. And we work together whenever there is alignment on the three pathways that Mr Lye highlighted: identifying strategic areas for investment, growing our local champions and developing Singaporean talent.

G.         CONCLUSION

G1.    Mr Chairman, in an increasingly competitive global landscape, being pro-enterprise is essential to Singapore’s continued economic relevance.

a.  MOF is systematically improving our regulatory environment to reduce compliance costs and respond to business needs.

b.  We will continue to closely partner businesses, industry associations and unions to maintain Singapore’s position as one of the best places in the world to do business.

c.  Thank you.

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