SINGAPORE: Singapore has been named the most business-friendly economy for the seventh consecutive year.
Meanwhile, the country was ranked fifth out of 185 economies surveyed where paying taxes is easy, according to a report by the World Bank, the International Financial Corporation (IFC) and PricewaterhouseCoopers (PwC).
A medium-sized firm in Singapore is subject to an average total tax rate of 27.6 percent.
This is significantly lower than the total tax rate of 36.4 percent for the Asia Pacific region and the world average of 44.7 percent.
Released in Singapore on Wednesday, Paying Taxes 2013 is an annual study measuring all mandatory taxes and contributions that a medium-sized firm must pay in a given year.
Singapore has a stable and simple tax system, with a low number of compliance hours and few tax payments a year.
Ms Josephine Teo, Minister of State for Transport and Finance said: "Singapore sees this as a source of competitive advantage, not only to keep our tax rates low but at the same time, make tax administration efficient for businesses operating here."
Meanwhile, the Singapore government has put in place initiatives to reduce compliance costs and improve productivity.
These include a co-funding scheme to help companies review their Goods and Service Tax (GST) control framework, which is estimated that a company can potentially save up to S$150,000 under this programme, as well as a simplified tax return form to reduce the time to comply for smaller businesses.
But experts said Singapore's range of tax incentives may increase tax administration burdens, particularly for smaller firms.
David Sandison, tax partner at PwC Singapore said: "We see this particularly in areas in productivity and the innovation credit scheme where some local businesses are finding it difficult to comply and understand and therefore, they're not taking advantage of things that are on offer."
The authorities will need to keep an eye on the compliance burden of companies when implementing tax reforms.
According to the study, Singapore's current ranking may drop in future rankings as other economies are making broader-based tax policy changes.
- CNA/lp
S'pore named most business-friendly for seven consecutive years
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S'pore named most business-friendly for seven consecutive years
