Experts at our Budget 2019 seminar shared how businesses can adapt to the latest tax developments amid greater uncertainty from current trade wars and Brexit concerns. Participants also learnt about organisational practices that are crucial for enhancing cybersecurity.
While direct tax costs will rise from YA 2019 onwards, International Tax Director Hsu Chong Hoe said that businesses can avail themselves of various grants, such as the Productivity Solutions Grant, Enterprise Development Grant as well as other financing and support schemes to help in company restructuring, employee training, adoption of technology and digitisation as well as venturing overseas. “Hopefully, measures to encourage productivity and efficiency improvements will help to offset some of the tax increase,” he added.
GST Partner Richard Ong warned that businesses will face a hard time if they do not stay up to date on the latest GST reporting requirements. “Some B2B companies may not be aware that they are in the category of firms not entitled to full input tax claims,” he said. “A company may also have non-operating income that could put it in a position where a reverse charge would apply to it.”
Richard added that assistance from software vendors is needed to calibrate accounting systems that lack the capability to take the reverse charge — expected to take effect from 1 January 2020 — into account.
Commenting on changes to the 2010 OECD Transfer Pricing Guidelines, Transfer Pricing Director Rajnish Singh stressed that businesses should be aware of two separate, critical risk elements — funding risk and operational risk. “Mere contractual assumption of funding risk without active control will only entitle the entity to a risk-free return,” he said.
Business Consulting Director Hoi Wai Khin shared lessons learnt from last year’s SingHealth cyberattack. “A dismissive attitude towards cybersecurity makes firms vulnerable to cyberattacks,” he said, adding that businesses should consider implementing the recommendations by the Committee of Inquiry tasked with investigating the incident.
These include improving staff cybersecurity awareness to better prevent, detect and respond to security incidents and subjecting privileged administrator accounts to tighter control, among others.
Frost & Sullivan Research Analyst Vivien Pua shared that consumers are increasingly concerned about security and privacy and will make their buying decisions accordingly. They also tend to value security over convenience, with many stopping use of an organisation’s services if it experiences a data breach.
Amid lingering trade tensions, tighter financial conditions and weaker US and Chinese growth, Selena Ling, Head of Treasury Research & Strategy at OCBC Bank, said that the global economy is set for a slowdown although a recession is not expected for now. Describing the current situation as a Goldilocks economy, one which is neither ‘too hot’ nor ‘too cold’, she added that market sentiments remain ‘choppy’ given concerns over the US-China trade war, monetary policy normalisation and Brexit.
The seminar on 5 March 2019 was jointly organised with OCBC Bank.