SINGAPORE--When Singapore's finance minister delivered the Budget Statement, there was a lot in the way of incentives for innovation. However, Members of Parliament (MP) have since called for more initiatives to encourage the "green" effort in the country.
One thrust of Singapore's 2008 budget announced Feb. 15, is to spur the growth of innovative enterprises with significant incentives for them to create new ideas and products.
To make innovation pervasive in the economy, Minister of Finance Tharman Shanmugaratnam announced incentives to encourage research and development (R&D).
"In this year's budget, we will make Singapore one of the most competitive places for companies, big and small, to do R&D," declared the minister.
The government raised the quantum of tax deduction for expenditure incurred on R&D done in Singapore from 100 percent to 150 percent. This means that for every S$100,000 (US$71,100) of local R&D expenditure incurred, S$150,000 (US$106,650) may be claimed as a tax deduction.
Two new R&D incentives will also be introduced: a broad-based tax allowance that could be used against additional expenditure on R&D that companies do in Singapore; and an incentive to allow research intensive startups to convert their losses into cash grants of up to S$20,250 (US$14,400) per year.
On Monday, at the budget debate in Parliament, some officials said the government should provide more green incentives to encourage businesses and individuals to adopt environment-friendly practices, according to local media reports.
North West District mayor Teo Ho Pin suggested introducing incentives in three key areas: transportation, building and construction, and energy efficient products.
Building owners may be putting off fitting more efficient air conditioning systems, for example, as this would cost more in the short term, Teo said.
He also suggested the government provide more tax incentives, such as green property tax rebates for buildings designed and built with eco-friendly components.
Other MPs suggested the provision of fiscal incentives for eco-friendly business measures, such as a zero-rated goods and services tax for the procurement of energy saving devices, and enhanced capital allowances for energy efficient equipment used by companies.