Debated in Parliament on 18 Feb 2020.
Assoc Prof Walter Theseira asked the Minister for Trade and Industry regarding the $15.2 billion in fixed asset investments in 2019 (a) what is the dollar cost in grants and incentives to attract these investments; (b) how many of the 32,814 new jobs to be created are projected to be net job creation, rather than substitution of existing jobs in other firms or sectors; and (c) of the $15.2 billion, what amount is projected to be invested in the absence of grant and incentive support from EDB.
The Singapore Economic Development Board (EDB) uses a range of grant and tax incentives to attract investments into Singapore. These are compliant with the World Trade Organisation (WTO) rules, as well as with the Organisation for Economic Cooperation and Development (OECD) rules to address base erosion and profit shifting.
The value of incentives awarded is a fraction of the projected total investment. Tax incentives are notional, and do not erode the tax base from existing activities. In addition, if a tax incentive recipient is not profitable, it will not enjoy any benefit. Other incentives such as training or research and development (R&D) grants are modest. Moreover, these grants are administered on a reimbursement basis. In other words, if the grant recipient does not incur the expenditure, it will not receive the grant.
The number of jobs created are new jobs linked to new and expansion projects committed in that particular year.
It is not meaningful to hypothesise the investments into Singapore absent these incentives. Competition for these investments is intensifying, and we must continue to remain globally competitive and an investment destination of choice. Doing so requires us to go beyond incentives, to strengthen our fundamentals such as our strong rule of law, pro-business environment, physical and data connectivity, and access to skilled talent. MTI will continue to do so, to grow our economy and better Singaporeans' lives.
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