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SINGAPORE : The 2-percentage point cut in corporate tax and 1.5 point increase in employers' CPF contribution will affect companies differently.
According to business associations and companies that Channel NewsAsia spoke to, it would depend on whether the business is labour-intensive and whether the company has a sizeable turnover to fully enjoy the tax reduction.
The Singapore International Chamber of Commerce said the budget announced on Thursday would help grow small businesses.
Phillip Overmyer, Executive Director, Singapore International Chamber of Commerce, said, "Many of our members are looking for companies, small companies that provide ideas, innovations, and different ways to develop products and run businesses.
"And those are the kind of companies that Singapore needs to develop, and they tend to be small companies. This added bonus, if you will, to enhance the profitability of small companies is a very good thing."
But the association does not think the benefits stemming from a corporate tax cut are the same for every company.
Mr Overmyer said, "If your company is very profitable, and if your company doesn't have a lot of employees, industries like petro-chemical sector, the big numbers in income tax, you're profitable; the income tax goes down by 2 (percentage points) that's a big number to you; you don't have many employees relative to your revenue, then CPF is not such a big deal.
"At the other extreme, smaller companies, services companies, hospitality industry for example, where there are many employees, and profitability may be marginal in those sectors of small service-related businesses, there we will really have to do our sums to see whether it's better or worse in the end."
For a public-relations company like Asia PR Werkz, human resource is both its biggest asset and biggest cost.
The company said the increase in employers' contribution to CPF would definitely impact its bottomline, but it appreciates the off-set measures.
Cho Pei Lin, Director, Asia PR Werkz, said, "I have to commend the government for its very well thought-out plan. They did consider that several business decisions...made prior to the Budget announcement did not consider this aspect of the increment of cost.
"And giving us about two years is very ideal, so that in the near future, as we are making business decisions, we would start taking this amount into consideration and therefore allowing us to make provisions for such an expense."
The government will give further details of the application process and eligibility criteria for the CPF cash rebate by May 1. - CNA/ms
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