Support Schemes
7 Feb 2024
Ms Hazel Poa asked the Deputy Prime Minister and Minister for Finance (a) for the past three years, how many individuals or households were eligible for support schemes which benefits were meant to be automatically disbursed but did not receive the support; (b) how many complaints or appeals were made concerning suspected erroneous payouts including fraud cases; and (c) whether there were any cases in the last five years where additional benefits were found to be erroneously disbursed to those not eligible.
Mr Lawrence Wong: Social support schemes which disburse benefits automatically make use of administrative data available to the Government to disburse the benefits accurately.
In 2023, there were about 20,000 enquiries and appeals for the GST Voucher scheme. The vast majority of disbursements are accurate. But adjustments were made to the amount disbursed for some cases, due to changes in the individuals’ latest circumstances.
We strive to keep our data accurate and updated. But there is a small proportion of cases where adjustments have to be made. These are discovered through internal audits, audits by the Auditor-General, and also feedback from the public. For example, in its FY2021/2022 report, the Auditor-General’s Office identified 3,166 ineligible HDB households who received the GST Voucher – U-Save, or about 0.3% out of more than 950,000 eligible households. In such cases, we would rectify the errors and do a thorough review to tighten our operational processes.
We have also encountered a small number of cases of erroneous payouts due to fraud. The Government remains committed to upholding high standards of accountability and integrity. We have zero tolerance for fraud. Any potential offences will be thoroughly investigated and referred to the Police if there are grounds to do so.
Training on Procurement Procedures
3 Oct 2023
Ms Hazel Poa asked the Deputy Prime Minister and Minister for Finance (a) whether the Government currently conducts a standardised training on procurement procedures for all officers across the Public Service; (b) if not, why not; (c) whether such standardised training will be able to prevent the recurrence of procurement-related lapses across the public sector.
Mr Lawrence Wong: Since 2018, all officers new to the procurement function are required to complete a compulsory e-learning training module, which covers the standard procedures for Government procurement.
While training is important, it cannot completely prevent lapses, especially given the large number of procurement transactions undertaken each year. The Government will continue to find ways to reduce such procurement-related lapses. For example, the Finance and Procurement Academy, set up by the Ministry of Finance, regularly shares with procurement officers the lessons from past lapses as well as the good practices to adopt.
Losses from Cryptocurrency Platform FTX
29 Nov 2022
Ms Hazel Poa asked the Deputy Prime Minister and Minister for Finance in cases where large investment losses are made by Temasek Holdings and GIC, whether internal and external investigations are conducted to ascertain whether there is negligence or misconduct.
Ms He Ting Ru asked the Deputy Prime Minister and Minister for Finance (a) whether there is a Singapore equivalent of the Norwegian Ministry of Finance’s Council of Ethics for the observation and exclusion of companies from the Norwegian Government Pension Fund Global; and (b) if so, whether the list can be shared and maintained publicly for full accountability.
Ms Hazel Poa asked the Deputy Prime Minister and Minister for Finance (a) how does the Government monitor and assess the performance of Temasek Holdings and GIC; (b) whether monitoring and assessing their performance includes benchmarking their performance with those of other funds; and (c) if so, what are the funds against which Temasek Holdings and GIC are benchmarked against and how do they compare.
Ms He Ting Ru asked the Deputy Prime Minister and Minister for Finance (a) whether there are guidelines for the requisite sustainability and environmental due diligence and audits for state-linked investments locally and overseas; (b) whether there are guidelines for monitoring investments with potentially substantial climate change impact; and (c) how can state-linked investments continue to do their part and strengthen their contributions to make progress on global sustainability and environmental responsibility.
Mr Lawrence Wong: I thank the Members for the questions. I will address them in my reply at the 30 November 2022 Parliament Sitting.
30 Nov 2022
The Deputy Prime Minister and Minister for Finance (Mr Lawrence Wong) (for the Prime Minister): Mr Speaker, with your permission, can I answer Question Nos 3 to 20 as well as all other Parliamentary Questions (PQs) related to the bankruptcy of the trading platform FTX together?
Mr Speaker: Please do.
Mr Lawrence Wong: Sir, before I address these questions, let me let me reiterate the Government’s and MAS’ overall approach to digital assets.
We have drawn a sharp distinction between growing an innovative and responsible digital asset ecosystem, and speculation in cryptocurrency, which we actively discourage for the retail public. We encourage and support innovation in digital assets because we see potential for new technologies to transform cross-border payments, trade and settlement, as well as capital market activities.
Early forecasts have proven too optimistic and it is still not clear that blockchain technology will develop beyond limited use cases into a gamechanger for a wide range of industries. And this is why we are piloting specific use cases to test the possibilities in the financial sector.
Cryptocurrencies are a different matter. They are purely speculative as an investment asset and have no intrinsic value. That is why MAS has consistently warned the retail public not to deal with them.
Members have raised two broad issues in their questions. First, on regulatory measures and the impact of the FTX bankruptcy on our financial system; and second, on the investments made by Temasek in FTX itself.
Let me start with the first issue. The collapse of FTX and other major cryptocurrency platforms should bring about much-needed rationalisation in the cryptocurrency space. The repercussions on the cryptocurrency ecosystem globally are still unfolding and we are watching this.
We do not have data on the number of Singapore retail users of FTX, just as for other platforms that are not licensed here and do not operate in Singapore. Unfortunately, those who invested in cryptocurrencies through FTX’s global platform would have lost money.
As for Singapore’s broader financial system and economy, our assessment is that spillovers from the FTX collapse will be very limited. MAS’ surveillance shows that key financial institutions in Singapore have insignificant exposures to cryptocurrency and crypto players.
MAS has explained its approach to regulating financial institutions providing cryptocurrency services, also known as digital payment token (DPT) service providers, in Singapore.
Such DPT service providers are regulated by MAS to address money laundering, terrorist financing and technology risks. Whether the DPT service providers can address these risks robustly is a key consideration in licensing them to operate in Singapore. Importantly, DPT service providers are currently not regulated for safety and soundness, nor for investor protection. This is also the prevailing approach in most jurisdictions. MAS has been consistently warning since 2017 that dealing in cryptocurrencies is hazardous. And recent events have underscored these hazards.
MAS has also in its recent statements explained the role of MAS’ Investor Alert List (IAL) and why FTX was not listed on it. Let me set this out again.
The IAL serves a very specific purpose: to warn the public of entities that may be wrongly perceived as being regulated by MAS, especially those who solicit Singapore customers without the requisite licence. MAS did not have reason to list FTX on the IAL because there was no evidence that it was soliciting users in Singapore. This is unlike Binance, which was placed on the IAL for actively soliciting users in Singapore without a valid licence and is being investigated by the Commercial Affairs Department (CAD) for possible violation of the Payment Services Act.
This does not mean that all entities which are not listed on the IAL are safe to deal with. MAS cannot possibly provide an exhaustive list of all the unsafe or unlicensed entities that exist in the world.
Going forward, MAS plans to introduce some basic investor protection measures for DPT service providers which are licensed in Singapore. MAS had recently published a consultation paper, which includes proposals that DPT service providers, amongst other things: (a) administer a risk awareness test to evaluate if potential retail customers are suitable for accessing cryptocurrency services; (b) segregate customers’ assets from their own assets so as to prevent lending out of customers’ money and protect customer interests should the service provider fail; and (c) refrain from operating a trading platform while simultaneously taking proprietary positions for their own account, to prevent conflicts of interest.
After receiving industry and public feedback, MAS will finalise the proposals and implement appropriate regulatory measures.
Let me emphasise that even with these proposed measures, MAS will not be able to prevent DPT service providers from failing or customers from suffering losses. Cryptocurrency platforms can collapse due to fraud, unsustainable business models or excessive risk-taking. FTX is not the first cryptocurrency platform to collapse, nor will it be the last. Further, even if a cryptocurrency platform is well-managed, cryptocurrencies themselves, as I mentioned earlier, are highly volatile and have no intrinsic value. Those who trade in cryptocurrencies must be prepared to lose all their value. No amount of regulation can remove this risk.
Next, let me address the Temasek investment in FTX and the Government’s stance on our investment entities and Statutory Boards’ exposure to digital assets and cryptocurrencies.
The Government does not prescribe guidelines on the allocation of specific assets or asset classes, whether for cryptocurrencies or other assets. This applies for our Statutory Boards, as well as our three investment entities managing our whole-of-Government assets – namely Temasek, GIC and MAS.
Statutory Boards have specific mandates and functions. They are not investment entities, but they have the flexibility to invest their surpluses and they typically do this through external fund managers, under the oversight of their respective supervising boards and Ministries. And we expect Statutory Boards to make prudent investment decisions and not be distracted from their core functions.
For our investment entities, the Government sets out its risk tolerance limits, monitors for appropriate diversification in asset classes, sectors and geographies and ensures that downside risks are not excessive. In this spirit, the Government does not prescribe an exclusion list for specific assets. But we expect the entities to incorporate environmental, social and governance, or ESG, considerations into their investment processes. And they should do so in a way that best suits their investment mandates and preserves their reputation with global partners and markets.
Ultimately, the Government holds the boards and management teams responsible for formulating investment strategies in accordance with the Government’s overall risk tolerance.
One of the areas Temasek’s and GIC’s private equity arm operate in is new technology and early-stage companies.
There will always be new waves of innovation and technology that seek to disrupt the status quo. Some waves will turn out to be hype and fizzle out over time. Other technologies will prove revolutionary and transformational, like the Internet. But even with genuinely revolutionary technology, there are risks. Many startups will fail while a few will prove successful and grow into industry leaders, like Tencent or BioNTech.
The skill of venture capitalists lies in discerning the promising projects and backing them. Risk taking is an essential part of such investments.
As long-term investors, our investment entities have to operate in this space. They do their best due diligence based on the information available. Having made the investments, they monitor the investee companies closely, but no amount of due diligence and monitoring can eliminate the risks altogether.
Insofar as blockchain technology is concerned, Temasek and GIC have some investments in the digital assets space, but they have no direct exposure to cryptocurrencies.
It is disappointing when there is a loss by our investment entities, as in the case of Temasek’s investment in FTX. Even more so, because the loss arose from what turned out to be a very badly managed company and from possible fraud and mishandling of customer funds. The fact that other leading global institutional investors, like BlackRock and Sequoia Capital, also invested in FTX does not mitigate this.
What happened with FTX, therefore, has not only caused a financial loss to Temasek, but also reputational damage. Temasek recognises this and has issued a comprehensive statement to explain its due diligence process and the circumstances leading to its investment in FTX. Temasek has also initiated an internal review by an independent team to study and improve its processes, and to draw lessons for the future.
I am confident that the Temasek Board and management team will learn and improve from this experience.
At the same time, we should see this FTX loss in the broader context of Temasek’s performance in early-stage investments. After writing-off the FTX investment, Temasek’s early-stage portfolio, as at March this year, has generated an internal rate of return in the mid-teens over the last decade – better than industry averages.
The FTX loss will also not impact the Net Investment Returns Contribution (NIRC), as the NIRC is tied to the overall expected long-term returns of our investment entities and not to individual investments.
Following the FTX collapse, some Members have suggested implementing more guidelines and safeguards over the investments made by Temasek and GIC. That is understandable, but the governance structures in place today for Temasek and GIC are already more extensive than those of a typical company.
Temasek, which is an investment holding company, is audited by commercial auditors. GIC, which manages public funds, is audited by the Auditor-General. As Fifth Schedule entities, both Temasek and GIC are subject to the President’s oversight of their budgets and key appointments. In Parliament, if there are any questions by Members about the performance of the entities, MOF will respond to them, as we are doing now.
There is, therefore, no need for additional audit requirements or Parliamentary Committees. Instead, we should insulate the boards from political pressures. Let them do their work, carry out their responsibilities and fulfil their investment mandates, commercially and professionally.
The investment entities themselves publish their performance with respect to broad market indices. In Temasek’s case, the MSCI equities’ indices; and in GIC’s case, the Reference Portfolio, comprising 65% global equities and 35% global bonds. These market indices and data from reputable global investment funds serve as useful reference. But ultimately, the Government evaluates the entities based on their long-term performance and their track records show that they have performed creditably, even in challenging environments.
Sir, in conclusion, the FTX loss is disappointing and is being taken seriously. But the occurrence of investment losses, does not in itself imply that the governance system is not working. Rather, this is the nature of investment and risk-taking. What is important is that our investment entities take lessons from each failure and success, and continue to take well-judged risks in order to achieve good overall returns in the long term. In this way, we can continue to add to our national reserves and provide a stable income stream to fund Government programmes for a long time to come.
Ms Hazel Poa (Non-Constituency Member): Thank you, Mr Speaker, I had filed two Parliamentary Questions (PQs) on how Government manages these two investment entities – GIC and Temasek. I do not believe they have been answered in the Minister’s answer earlier.
Firstly, when there are huge investment losses, does MOF demand internal and external investigations, just to make sure that there is no evidence of negligence or misconduct? And the second question is does MOF benchmark the performance of Temasek Holdings and GIC against other comparable funds, like other sovereign wealth funds? If so, which funds are these and how do they compare?
Mr Lawrence Wong: Sir, I did mention briefly in my reply just now that when it comes to performance management, we do assess and monitor closely the long-term performance of our investment entities. The published references are the GIC reference portfolio as well as the MSCI equities indices, which are published by both Temasek and GIC respectively.
If you look at both entities performance, vis-a-vis these reference points, they have done well, in fact. It is all published information. They have done well over the long term.
We also track the performance of other fund managers. That is more internal. But in fact, many of these funds’ performances are published. Anyone can look at how private equities have done – top quintile, top quantile – asset managers, how they have done over the long term. That information is published. So, anyone can look at that data and compare that with GIC and Temasek’s performance, which is also published.
The facts remain that even after comparing GIC and Temasek with other leading institutional investors, our two investment entities have done well, creditably, amidst a more challenging investment environment. So, that is for performance management.
On losses, whether or not we require specific audits or reviews to be done, losses happen all the time as part of the investment process. So, you have to really take that into consideration and look at the overall portfolio rather than look at each individual project that does not do well. As I mentioned just now, if you look at the overall portfolio for both Temasek and GIC, their performance has been creditable and in fact, in many instances, above industry averages.
But in this case, because it is such an exceptional situation, it has gotten so much publicity, it has also impacted the Temasek reputationally, Temasek itself has undertaken its review, it has put out information and it has taken the extra step of doing a further review; which it has also said it will do – an internal review led by an independent team reporting to the board, with the purpose of looking at how it can learn from this experience and improve its own processes.
Corporate Tax
3 Oct 2022
Ms Hazel Poa asked the Deputy Prime Minister and Minister for Finance in each of the years from 2018 to 2022, what is the total profit before tax and corporate tax paid by companies with (i) up to $10,000 (ii) from $10,000 to $200,000 (iii) from $200,000 to $1 million (iv) from $1 million to $10 million (v) from $10 million to $100 million (vi) from $100 million to $1 billion and (vii) more than $1 billion, in profits respectively.
Mr Lawrence Wong: Table 1a shows the requested information for the total accounting profit before tax (PBT) by companies in the respective PBT brackets. The information is based on companies assessed by IRAS in each Year of Assessment (YA). Information for YA 2022 is not yet available.
Table 1b shows the total corporate income tax (CIT) paid by companies in the respective PBT brackets.
The member may be asking for the above data to compute the effective tax rates (ETR) for companies. But to compute the ETR, we use the chargeable income before group relief, loss carry back, partial tax exemption and start-up tax exemption, and not their accounting PBT. As mentioned before in this House, the average ETR for SMEs (i.e. companies with turnover of up to S$100 million) was 3.4% for YA 2010 and 2.8% for YA 2019. The average ETR for non-SMEs (i.e. companies with turnover exceeding S$100 million) was about 8% to 10% over the same period.
28 Nov 2022
Ms Hazel Poa asked the Deputy Prime Minister and Minister for Finance in each of the years from YA2018 to YA2021, what is the effective tax rate for companies with (i) up to $10,000 (ii) from $10,000 to $200,000 (iii) from $200,000 to $1 million (iv) from $1 million to $10 million (v) from $10 million to $100 million (vi) from $100 million to $1 billion and (vii) more than $1 billion, in profits before tax respectively.
Mr Lawrence Wong: There have been requests from members for different types of information on corporate tax on several occasions since last year. Each new permutation of data request requires intensive effort to compile. The Government already publishes extensive data on corporate tax, which is publicly available on www.data.gov.sg. This includes data that can be used to estimate the overall effective tax rate for companies in each of the published chargeable income band. We suggest that Ms Hazel Poa refer to the website to access the necessary data.
Government Financial Statements for FY2021/2022
13 Sep 2022
Ms Hazel Poa asked the Deputy Prime Minister and Minister for Finance (a) whether the total financial assets of $1.57 trillion in the Statement of Assets and Liabilities as per the Government Financial Statements for FY 2021/2022 include the latest reported increase in assets held by GIC and Temasek Holdings; and (b) if not, how much will those contribute to the increase in the total financial assets for FY 2022/2023.
Mr Lawrence Wong: The Statement of Assets and Liabilities (SAL) records the Government’s gross financial assets, comprising cash and investments, that are set aside in deposit accounts and funds that are established in accordance with the laws governing them. Government assets managed by GIC, as well as Government investments in Temasek, are recorded in the SAL, according to its basis of preparation.
13 Sep 2022
Ms Hazel Poa asked the Deputy Prime Minister and Minister for Finance what is the breakdown of the $980 billion in the Government Securities Fund as per the Government Financial Statements for FY 2021/2022.
Mr Lawrence Wong: The Government Financial Statements provide information on the Government Securities Fund, including a breakdown of the outstanding borrowings issued under the Government Securities Fund. Details are included in Section 1 (VII) of the Government Financial Statements for the Statement of Government Securities Fund.
Tax Loophole of Non-Bare Trusts
2 Aug 2022
Ms Hazel Poa asked the Deputy Prime Minister and Minister for Finance (a) how was the tax loophole of non-bare trusts discovered; and (b) when was it discovered.
Mr Lawrence Wong: This issue was addressed during the Second Reading of the Stamp Duties (Amendment) Bill 2022. As explained, trusts can be set up for different reasons and involve highly complex arrangements. MOF looked into this as part of our periodic policy review, and did a thorough study into the issues, before deciding to move on the legislative amendments.
Foreign Reserves
5 Jul 2022
Ms Hazel Poa asked the Deputy Prime Minister and Minister for Finance (a) how much of the official foreign reserves have been transferred to GIC to date; and (b) how much additional reserves has MAS accumulated since the Monetary Authority of Singapore (Amendment) Act came into operation on 21 February 2022.
Mr Lawrence Wong: Since the Monetary Authority of Singapore (MAS) (Amendment) Act commenced on 21 February 2022, MAS can subscribe for Reserves Management Government Securities (RMGS) to transfer Official Foreign Reserves (OFR) not needed by MAS to conduct monetary policy and support financial stability, to the Government for longer-term management by GIC. As at end-May 2022, the outstanding amount of RMGS was S$122.6 billion, net of the RMGS redeemed by the Government.
MAS’ OFR balance decreased by S$105.9 billion from S$579.2 billion as at end-February 2022 to S$473.3 billion as at end-May 2022,1 primarily reflecting the above transfers to the Government to bring OFR closer to the optimal amount as assessed by MAS. This was partially offset by other factors such as reserve accumulation through monetary operations and investment income.
Note(s) to Question No(s) 4: Available at https://www.mas.gov.sg/statistics/reserve-statistics/official-foreign-reserves
GST Hike
4 Apr 2022
Ms Hazel Poa asked the Minister for Finance how much will the effective corporate tax rate have to be raised in order to raise the same revenue as a two percent hike in GST.
Mr Lawrence Wong: The effective tax rate is most useful when looking at the tax burden of a company, after taking into account the design of the corporate tax system such as further tax deductions, capital allowance and schemes such as the Partial Tax Exemption (PTE) and Start-Up Tax Exemption (SUTE) schemes. Different companies have different effective tax rates. For the purpose of Ms Poa’s question relating to overall revenue yield, we have done simulations based on the headline corporate income tax (CIT) rates.
To simulate how much the headline CIT rate has to increase to generate $3.5 billion each year (i.e. the revenue generated from the GST increase), we used the data for Years of Assessment (YA) 2019 and 2020, so that the data would not be distorted by the effects of COVID-19, and we applied the current parameters of the corporate tax system (such as the recently revised parameters of the SUTE and PTE schemes). We also removed the effect of temporary measures such as the CIT rebate in YA 2019 and YA 2020.
If we assume that the tax base remains unchanged, in other words, that firms do not respond to the change in CIT rates, our simulation shows that to generate an additional $3.5 billion every year, we will need to raise the CIT headline rate by at least 5%-point to 22%.
In reality, the above assumption is unlikely to hold. Firms will likely respond to this CIT increase, and will move some of their operations out of Singapore, especially since many competitor jurisdictions have lower CIT rates. For example, Thailand’s CIT rate is 20%, Hong Kong’s CIT rate is 16.5%, Switzerland’s CIT rate is 14.9% and Ireland’s CIT rate is 12.5%. A reduction in our tax base means that to raise an additional $3.5b from CIT, we will need a headline CIT rate in excess of 22%.
Such an increase in CIT rate will have a major impact on Singapore’s competitiveness. We will find it harder to attract new investments. Ultimately, Singapore and Singaporeans will be the ones who lose out.
MOF will continue to review all revenue sources. When we need to raise more revenue, we will ensure that any increase in taxes is implemented in such a way that is fair and inclusive and does not hurt Singapore’s overall competitiveness.
4 Apr 2022
Ms Hazel Poa asked the Minister for Finance what is the additional cost of implementing a multi-tiered GST that will allow for the exemption of basic necessities.
Mr Lawrence Wong: As explained during the budget debate, we have already achieved the effect of multi-tier effective GST rates, with higher effective GST rates for higher-income households. This is achieved by implementing GST with the permanent GST Voucher and the absorption of GST on publicly-subsidised healthcare and education. This is a more effective way of specifically helping the low-income Singaporean households, than exempting certain goods from GST for all who consume them. In fact, various studies have shown that an exemption for a basket of essential goods tends to benefit the well-to-do more, as they spend more on everything, not just luxury items, but basic necessities as well. So such a move will not help to make our GST system fairer.
We do not have estimates of how much it will cost businesses and IRAS to implement a multi-rate GST system in Singapore. What we do know is that these costs will ultimately be passed on to Singaporeans, both as consumers and taxpayers. We also know that our conclusion is well supported by the experiences of other jurisdictions with multi-rate GST systems:
(a) A 2021 study by the European Parliamentary Research Service noted that “a uniform VAT system, combined with direct instruments (such as direct transfers), would be more efficient”; that “differentiated VAT rates, exemptions, and registration thresholds lead to higher compliance costs”; and that “as a large proportion of compliance costs are fixed and independent of firm size, SMEs are disproportionately burdened”. It further cautioned on “the costs of reduced VAT rates that go beyond revenue losses and include, for example, VAT fraud” which “are difficult to quantify”.1
(b) A 2006 study of VAT compliance costs in Sweden estimated that the compliance costs would be reduced on average by roughly 30% if a single rate system replaced a multi-rate system2. A 2005 study by the Swedish Government also estimated that borderline cases constitute roughly one-fifth of all dispute cases referred to their tax tribunal. A conservative estimate of the cost of resources in the public and private sector expended on these borderline dispute cases was about 700 million Swedish krona3 (or about SGD 146 million based on the exchange rate then).
Note(s) to Question No(s) 66: European Parliamentary Research Service (2021), VAT gap, reduced VAT rates and their impact on compliance costs for businesses and on consumers.
Skatteverket, Report 2006/3b Compliance costs of value added tax in Sweden, http://www.skatteverket.se/download/18.906b37c10bd295ff4880002550/rapport200603B, 2006.
Copenhagen Economics (2007), Study on reduced VAT applied to goods and services in the Member States of the European Union, Copenhagen.
Loss Sharing Framework
15 Feb 2022
Ms Hazel Poa (Non-Constituency Member): I thank the Ministers and the Ministries for the efforts that they have put in and continue to put in to prevent future scams. I have two supplementary questions.
Firstly, is MAS considering the contingency reimbursement model in the UK where banks reimburse scam victims which started on a voluntary basis but there are now plans to legislate it?
The second supplementary question: in working out the shared responsibility between banks and their customers, would MAS consider putting the onus more on the banks on the basis that: one, the banks are more tech-savvy and scam-savvy than the average bank customer and they have better resources to keep up-to-date with the latest tactics; two, it provides additional incentives on the banks to adopt a pre-emptive approach, for example, to consider the scam potential before pushing out new procedures or facilities; and thirdly, it is probably more cost-effective to focus scam prevention efforts from the ends of a few banks rather than public education on whole wide range of bank customers?
Mr Lawrence Wong: Mr Speaker, this must be my third question on the loss sharing framework. I can appreciate that there is a lot of interest in this and, as I said, it is a work-in-progress but to quickly answer Ms Poa’s two questions.
Number one: MAS will certainly look at models around the world in developing the details of this framework for the sharing of losses in an equitable fair share.
Number two: as she highlighted, the responsibility will be different for individuals and financial institutions. We are very mindful that individuals have a different set of resources and capabilities, compared to financial institutions. So, in developing the specific responsibilities for individuals and for financial institutions, we will certainly take that into consideration.
Award of Government Contracts
10 May 2021
Ms Hazel Poa asked the Deputy Prime Minister and Minister for Finance whether a supplier’s track record in terms of safety standards and compliance with manpower policies are taken into consideration in awarding Government contracts and whether suppliers with serious lapses will be banned.
Mr Heng Swee Keat: Companies doing business in Singapore are required to comply with prevailing employment and safety regulations. Any company with poor safety standards, or who has infringed manpower policies will be taken to task in accordance with the law, regardless whether their offences are related to public or private sector contracts.
Where it is relevant to the tender and likely to impact the supplier’s or the industry’s ability to safely deliver the goods or services, agencies will consider the supplier’s track record, including his safety or employment practices.
For instance, in public sector construction projects, safety-related criteria such as MOM’s demerit points accrued by contractors for safety lapses, amongst other safety considerations, account for 15 to 20% weightage in the Quality evaluation. For cleaning, landscape and security services, the Government has committed to buying only from providers that have consistent track records in their employment and professional standards, and pay their workers according to the Progressive Wage Model.
In addition to the above, a supplier that has committed serious safety lapses may also be excluded from being awarded government contracts for a period of time. As mentioned in MOM’s COS earlier this year, MOM is reviewing the workplace safety requirements expected of tenderers participating in public sector construction contracts and will be releasing further details later this year.
2 Aug 2021
Ms Hazel Poa asked the Minister for Finance (a) how many China- and India-headquartered companies and subsidiaries of such companies in the finance, ICT and professional services sectors are currently engaged by the Government as contractors; (b) what is the total value of these contracts; and (c) what is the number of Singaporeans employed by these companies.
Mr Lawrence Wong: Government procurement is conducted according to the principles of transparency, open and fair competition. Contracts are awarded to suppliers who are best able to meet the requirements published in each call for tender and achieves value-for-money, regardless of nationality of their headquarters. We do not track the headquarter locations of our suppliers or their parent companies.
In 2020, Government engaged more than 1,400 suppliers for ICT, finance and other professional services, of which 86% are located in Singapore. These entities won about 97% of the approximately $1.5 billion contract value awarded by Government for these services. The Ministry of Manpower (MOM) publishes statistics on the number of employed residents by industry sector in the Labour Force in Singapore reports which are published annually and available publicly on MOM’s website.
Tax Incentives for Companies to Donate
1 Feb 2021
Ms Hazel Poa asked the Deputy Prime Minister and Minister for Finance in view of the difficulties that charities are encountering in raising funds under the current climate, whether the Ministry will enhance tax incentives to encourage companies still doing well to donate.
Mr Heng Swee Keat: The Government adopts a multi-pronged approach to encourage charitable giving from individuals and businesses. This complements Government funding and support for our charities and their beneficiaries.
Currently, the Government provides a 250% tax deduction to qualifying donations1 made to Institutions of A Public Character (IPCs). In addition, through the Business and IPC Partnership Scheme (BIPS), businesses can enjoy 250% tax deduction on wages and related expenses for corporate volunteering. Beyond tax incentives, the Government also supports charitable giving through grants that match donations raised.
The current 250% tax deduction on qualifying donations to IPCs is relatively high, compared to other jurisdictions such as Australia, Hong Kong, and United States.
Companies that are doing well, and choose to give or volunteer generously, will benefit from lower taxes.
However, we must also pay attention to our fiscal position which has been weakened by the impact of COVID-19 on our economy. Hence, we have to strike a balance between granting tax benefits to encourage charitable giving, and ensuring sufficient tax revenue for our recovery and spending needs.
We will continue to review how best to encourage sustained giving through tax and non-tax measures.
Note(s) to Question No(s)3: Qualifying donations to IPCs are: i) Cash donations; ii) Gifts of shares listed on the Singapore Exchange (SGX), or of units in unit trusts traded in Singapore; iii) Gifts of artefacts to approved museums; iv) Donation of public sculptures or works of art for public display to approved recipients; and v) Gifts of parcels of land or buildings.