With the Singapore government aiming for increased investment inflows and sustained economic growth in the future, the Singapore Budget 2010, which was unveiled on 22 February 2010, focused on measures that will help raise productivity and aid Singapore’s transformation into an advanced economy.

Post the global financial crisis, the focus has shifted to the Asian market and companies are embarking on an expansion drive across the region. Having established itself as a leading regional business and investment hub, Singapore is bound to attract a sizable number of MNCs and global entrepreneurs. However, with increased competition in the region from economies such as Hong Kong, India and China, the country needs to constantly reinvent itself in order to stay ahead of the game. With this agenda in mind, the Singapore Budget 2010 focuses on raising skills, innovation and productivity of workers and business enterprises.

The Key Measures of Singapore Budget 2010 include tax benefits and grants that will help companies to innovate and raise productivity. Companies will be entitled to tax deductions for investing in R&D, employee training, automation equipment, designs, IP acquisition and IP registration. A high-level National Productivity and Continuing Education Council is being set up to develop a comprehensive system for lifelong learning. A Workfare Training Scheme offers incentives to employers to send low wage and older workers for training. The government has also committed S$1.5 billion to seed a range of venture capital funds in partnership with the private sector over a ten-year period.

The 2010 Budget also includes several tax incentives to promote Singapore’s global competitiveness in legal services, financial services, transportation, marine financing, and clean technologies. Qualifying M&As will be entitled to a tax allowance equal to 5% of the acquisition value. Additionally, in a bid to promote entrepreneurial start-up formation, angel investors will be entitled to tax deductions.

While most economies are addressing their huge budget deficits by increasing the tax burden on their residents, Singapore’s 2010 Budget takes a different approach. Although Budget 2010 does not include significant tax cuts or subsidies that will provide immediate benefit to businesses and individuals, it does include measures that are focused on the long term growth of the economy. The 2010 Budget is evidently directed towards improving the efficiency of Singapore’s human resource capital; strengthening the capabilities of its business enterprises; and exploiting new opportunities in the global business landscape.