Economy & business — Topics

9 May 2023

Protecting Consumers and Businesses from Losses due to Disruption of Digital Services by Service Providers

Hazel Poa asked whether organisations are liable for consumer and business losses from digital service disruptions and if the government would impose minimum standards or protections.
Josephine Teo stated that liability is determined by the service terms or contracts between parties, not automatic government responsibility.
Existing regulations already require minimum service standards for critical sectors like telecom and banking, enforced by agencies such as the Infocomm Media Development Authority and Monetary Authority of Singapore.

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9 May 2023

Review of Rules to Safeguard Against Over-indebtedness

Melvin Yong asked how often rules against over-indebtedness are reviewed, when the last review occurred, and if a review is needed amid economic headwinds and rising credit card rollover balances.
Tharman Shanmugaratnam, for the Prime Minister, stated that MAS requires safeguards for mortgage and unsecured loans, including TDSR, loan-to-value limits, and income checks, with the last TDSR update in September 2022.
These safeguards are stricter than in most jurisdictions and have been effective, with non-performing mortgage loans decreasing from 0.5% in 2020 to 0.3% in 2022, and credit card bad debt write-offs halving from 7.1% to 3.5% over the same period.
MAS will continue monitoring the mortgage and unsecured credit landscape.

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9 May 2023

Annual Contributions to Philanthropic Activities by Family Offices

Dennis Tan asked if the Family Office Development Team tracks philanthropic contributions by family offices, the totals for the past five years, and whether such contributions could be included in criteria with clear conditions.
Tharman Shanmugaratnam replied that the team does not track these contributions but the Monetary Authority of Singapore continually reviews tax incentive schemes to ensure they benefit Singapore.
He added that authorities are studying whether tax incentives could encourage philanthropic activities or impact investing.

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9 May 2023

Application of Same Regulatory Standards Required for Opening of Bank Accounts to External Asset Managers

Don Wee inquired if external asset managers face the same stringent bank account opening standards as banks and the risk of regulatory arbitrage.
Tharman Shanmugaratnam stated that the Monetary Authority of Singapore imposes identical anti-money laundering and counter-financing of terrorism standards on external asset managers as on banks.
He confirmed that external asset managers must verify customer identity, establish sources of wealth and funds for high-risk customers, and monitor transactions continuously.
Tharman concluded that this equal treatment eliminates any possibility of regulatory arbitrage by external asset managers.

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9 May 2023

Rationale for $75,000 Threshold Amount in Deposit Insurance Scheme

The government explains that the $75,000 deposit insurance limit balances the need for adequate depositor protection with maintaining a sustainable and credible scheme for the banking sector.
The limit is calibrated to protect most small depositors, as it covers the majority of accounts in local member banks, while avoiding excessive risk exposure and cost to the financial system.
The $75,000 threshold is reviewed periodically against benchmarks in other jurisdictions, but differences arise due to variations in economic conditions, bank risk profiles, and deposit concentration.
While per capita incomes have risen, the review considers broader factors including deposit distribution, banking system stability, and potential moral hazard, rather than income levels alone.
The government confirms that the deposit insurance cap is subject to ongoing reviews to ensure it remains appropriate, with a formal assessment announced for future adjustments.

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9 May 2023

Data on Foreign Funds Flowing into Singapore through Family Offices

Leong Mun Wai requested annual data since 2020 on foreign funds flowing into Singapore via family offices, broken down by source country, and an assessment of their impact on foreign reserves, private property, and inflation.
He also asked for details on assets invested locally by single family offices under tax incentive schemes, specifically in listed equities, private equity, and qualifying debt securities.
Tharman Shanmugaratnam, responding for the Prime Minister, stated that these questions had already been addressed in a prior parliamentary reply from May 2023.

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9 May 2023

Amounts Raised and Breakdown of Donors of Rare Disease Fund

The Rare Disease Fund raised $4.9 million in public donations in 2022, with $2.3 million from foundations, $1.3 million from companies, and the remainder from individuals and others.
With the government’s $3-to-$1 matching grant, the total funds raised by the Rare Disease Fund in 2022 amounted to $19.2 million.
The Rare Disease Fund Committee has been actively reaching out to potential donors and conducting publicity efforts and will consider stepping up these activities to enhance donations.

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9 May 2023

Companies, Business Trusts and Other Bodies (Miscellaneous Amendments) Bill

The bill introduces four key sets of amendments to strengthen corporate governance and promote a pro-business environment, including tightening the compulsory acquisition framework to better protect minority shareholders by expanding the definition of related persons.
It allows disqualified directors to apply to the Registrar for permission to act as directors, reducing the disqualification period for first-time offenders to three years, and clarifies the disqualification rule when multiple companies are struck off within five years.
The bill increases penalties for directors who fail to prepare compliant financial statements, raising the maximum fine to $250,000 and adding a three-year imprisonment term for fraud-related offences.
It permanently permits companies, business trusts, and variable capital companies to hold fully virtual or hybrid meetings, with safeguards against technological disruptions and guidance from regulators on best practices.
Ministers addressed concerns about the court’s power to invalidate meetings, potential malicious disruptions, and the option for companies to still require physical meetings, clarifying that tax residency and jurisdictional issues remain governed by existing principles.

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9 May 2023

Financial Services and Markets (Amendment) Bill

The Bill establishes a secure digital platform, COSMIC, enabling financial institutions to share information on customers exhibiting multiple red flags of potential financial crimes, such as misuse of shell companies, trade-based money laundering, and proliferation financing.
Robust legal and operational safeguards are included to protect customer confidentiality, with information sharing only permitted when objective thresholds are met and subject to strict access controls, cybersecurity measures, and oversight by the Monetary Authority of Singapore.
The platform will initially involve six major banks on a voluntary basis, with plans to expand coverage and eventually make sharing mandatory in higher-risk circumstances, while addressing member concerns on implementation, inclusivity, and enforcement.

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9 May 2023

Impact of Higher Interest Rates on Residential and Commercial Mortgagee Listings, and on Bankruptcy Applications

The government noted a slight increase in bankruptcy applications in early 2023 and anticipates further rises among vulnerable borrowers due to higher interest rates and slower economic growth.
While mortgagee listings have not significantly increased, the Minister of State cautioned that these figures may overstate distress due to double-counting and lack of a central database, noting that foreclosures remained low in the first quarter of 2023.
Household mortgage payments have risen, with an average increase of $240 monthly for refinanced loans, but this is partially offset by a 10% average income growth over three years, cushioning the impact for most borrowers.

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9 May 2023

Benefits to Singapore from Setting Up of Singapore-Shanghai Comprehensive Cooperation Council

The Singapore-Shanghai Comprehensive Cooperation Council (SSCCC) has signed 37 agreements since 2019, boosting collaboration in finance, technology, urban governance, and people-to-people exchanges.
The SSCCC has facilitated Singapore companies expanding in Shanghai and supported joint projects, such as the Singapore-China YRD Joint Innovation Call and green building initiatives.
The Council has enhanced financial and digital ties, including cross-border payment solutions and an MOU on digital connectivity, benefiting SMEs and fostering economic growth.

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8 May 2023

Plans to Mitigate Effects of Shortage Occupation List on Reliance on Foreign Labour

Ms Hazel Poa asked the Minister for Manpower how the ministry plans to prevent the Shortage Occupation List from entrenching reliance on foreign labour or depressing wages for Singaporeans, and for how long such occupations are expected to remain on the list.
The Minister for Manpower explained that the Shortage Occupation List aims to complement local talent development by allowing companies to access foreign professionals for shortage occupations, with criteria including industry plans to train locals.
He stated that salaries for these occupations are competitive and will not depress wages for Singaporeans, as foreign professionals must meet the Employment Pass qualifying salary benchmarked against the top one-third of local professionals.
The Shortage Occupation List will be reviewed every three years to reassess shortages and whether commitments to develop the local pipeline have been achieved.

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8 May 2023

Review of Rare Disease Fund and Legislation to Support Citizen Patients Requiring Expensive Drug Treatments

Christopher de Souza questioned the Ministry of Health’s review of the Rare Disease Fund and potential financing schemes for citizens needing expensive treatments for rare diseases.
Ong Ye Kung explained the RDF, established in 2019, is a charity fund managed by a committee with community and medical experts, offering government matching and tax incentives for donations.
The fund currently focuses on life-threatening, lifelong treatments due to high costs and limited funds, but MOH is exploring broader coverage for novel therapies with the RDF committee.

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8 May 2023

Additional Taxes or Levies on Foreigners Purchasing Cars in Singapore

Joan Pereira asked the Minister for Transport about considering additional taxes or levies on foreigners buying cars amid rising Certificate of Entitlement prices.
S Iswaran responded by referring to a previous Ministerial Statement on 8 May 2023 that addressed this and related questions on Singapore's transport needs.
The response implies that existing policies and measures for managing car ownership and transport are already outlined in that statement.

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8 May 2023

Payment of ERP Charges for Public Buses on Designated Bus Routes

Public buses are required to pay ERP charges when travelling on designated bus routes, with these costs borne by public transport operators as part of their operating expenses.
The Land Transport Authority (LTA) does not reimburse public transport operators for ERP charges.
The total ERP charges paid by public transport operators were $1,910,847 in 2020, $153,231 in 2021, and $399,829 in 2022.

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8 May 2023

Utilisation Rate for Implemented Free Trade Agreements Signed with Trading Partners

Assoc Prof Jamus Jerome Lim inquired about the utilisation rates for each of Singapore's 27 implemented Free Trade Agreements (FTAs) with trading partners.
Minister Gan Kim Yong noted that while tariff savings data for these FTAs had been provided previously, comparing savings across different FTAs is not meaningful due to varying benefits beyond tariffs.
The Minister emphasized that FTAs also offer non-quantifiable advantages, such as improved intellectual property protection, investment safeguards, and regulatory transparency, which contribute to a better business environment.

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8 May 2023

Permanent Residency Granted, Funds Invested and Jobs Created under Global Investor Programme

Leong Mun Wai asked the Minister for Trade and Industry for data on permanent residencies, investments, and funds under the Global Investor Programme (GIP) since 2004, including returns on GIP funds.
He also requested estimates of jobs and business spending created by Options A and B of the GIP since 2004.
The Minister responded that details on permanent residencies, investments, and job creation under GIP were previously shared in Parliament in February 2023, but the ministry does not track investment returns of individual GIP funds.

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8 May 2023

Impact of Taiwan Semiconductor Manufacturing Company Locating Wafer Fabrication Plant in Singapore

Minister Gan Kim Yong declined to disclose whether Singapore is actively pursuing TSMC to locate a wafer fabrication plant in Singapore, citing government policy not to comment on potential investor projects.
The Minister did not provide any timeline for finalising a potential outcome, expected value of incentives, or projected impact on GDP, employment, and tax revenues.
The response emphasises that details on negotiations with companies like TSMC are kept confidential.

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8 May 2023

Plugging Revenue Leakage in Goods and Services Tax Act 1993 in View of Recent Court Decision

Edward Chia asked whether the Ministry would consider new legislation to address revenue leakage in the GST Act, following the Herbalife court decision.
Lawrence Wong explained that GST is charged on the discounted price unless non-monetary consideration, like services from the buyer, is involved, which would require GST on the full price.
The Herbalife case centered on whether GST should be charged on the discounted or full price of products sold to members, with the Comptroller arguing for the full price.
The High Court ruled in favor of Herbalife based on specific case facts, and IRAS is studying the judgment to decide next steps.

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8 May 2023

Conditions for Changing $1 Million Threshold for Businesses' Liability for GST Registration

Pritam Singh inquired whether the government plans to change the $1 million GST registration threshold and what conditions would trigger such a change.
Lawrence Wong explained that the $1 million threshold, established in 1994, was designed to ease compliance for small businesses like hawkers and neighborhood shops by avoiding extra costs that could be passed to consumers.
He noted that the threshold keeps the GST system simple and flexible, with about 70% of new registrations being voluntary even for businesses below the limit.
The government will continue to review the threshold's appropriateness as part of regular policy assessments.
No immediate changes to the threshold are planned, and any future adjustments would depend on ongoing reviews and policy considerations.

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