Singapore will prosper if the neighbouring Iskandar Malaysia region in the state of Johor does well, said Prime Minister Lee Hsien Loong on Tuesday.

Mr Lee, who was in Putrajaya to attend the annual leaders’ retreat with Malaysian Prime Minister Najib Razak, said he congratulated Mr Najib on the tenth anniversary of Iskandar Malaysia this year.

Since its launch, Iskandar Malaysia has attracted more than RM200 billion (S$64.3 billion) in cumulative committed investments, with a sizeable amount coming from Singapore companies.

Singapore is currently the second-largest foreign investor in both Iskandar Malaysia and Johor.

Mr Lee added that both governments continue to work closely together via a joint ministerial committee for Iskandar Malaysia.

This high-level committee has met a dozen times since it was formed in 2007. The last meeting was held in Singapore in March this year.

Mr Lee also noted that the various joint-venture projects between Singapore’s Temasek Holdings and Malaysia’s Khazanah Nasional are making good progress.

The two investment companies have a couple of joint projects in Iskandar Malaysia, namely Afiniti Medini and Avira Medini.

These have a strong focus on wellness and have a combined gross development value of some RM3 billion.

Temasek and Khazanah also have a joint-venture company in Singapore called M+S Pte Ltd, which operates two major mixed-use developments – Marina One in Marina South and Duo in the Ophir-Rochor area.

“(The joint projects) show visibly that this is a win-win partnership that is progressing well,” said Mr Lee at a press conference alongside Mr Najib at the Malaysian Prime Minister’s Office.

The subject of water also came up during the leaders’ retreat. Mr Najib said the two countries have agreed to work closely together to ensure that Singapore gets its share of water from Malaysia under the current agreement.

“There are some challenges, not least some of the effects of climate change that has affected the supply of water,” said Mr Najib.

Mr Lee said that when it comes to water, both Singapore and Malaysia are clear on where they stand on this important issue.

“We are happy that we’ve agreed on the importance of ensuring reliable and adequate water supplies from the Johor river as provided for in the 1962 water agreement, and to take the necessary measures in order to make this happen,” said the Singapore leader.

The Johor River Barrage is in the final stages of completion and will be fully operational by March 2017.

Mr Lee said this barrage has already made a difference to help increase the yield of the river.

Among the other topics that the two leaders discussed during their retreat were regional and international developments such as the impending change of government in the United States and Brexit in the UK.

They also talked about the importance of ASEAN integration and cohesion in a highly uncertain global environment.

Mr Najib said that both countries are “very pleased” with the overall state of bilateral relations between Malaysia and Singapore.

“There will always be challenges, but given the commitment at the highest levels that this should be an important relationship, one that is predicated on finding solutions, resolving problems and moving forward in a positive way,” he said.

“That’s the spirit that reflects the relationship that we’ve enjoyed between (PM Lee and I) and the two governments.”

leeuwen@sph.com.sg

This article was first published on December 14, 2016.
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A recent report has revived claims Singapore is a tax haven but the Singapore Government and experts here reject the label emphatically.

They say the report contains inaccurate assertions and fails to recognise recent steps here to crack down on tax evasion.

The Republic ranked fifth on a list of the “world’s worst tax havens” in the report compiled by British charity Oxfam, with the “worst” being countries which “employ the most damaging tax policies”.

Switzerland, long known for its banking secrecy, came in fourth and Bermuda placed first.

A Singapore Ministry of Finance (MOF) spokesman said: “Singapore’s tax policies are designed to support substantive economic activities in order to create skilled jobs and build new and enduring capabilities in Singapore.

“We do not condone any tax evasion activities or actions aimed at base erosion and profit shifting (Beps). Singapore is able to keep the headline corporate tax rate competitive at 17 per cent because we are fiscally prudent and have a diversified tax base.”

Beps includes booking profits in a nation with low corporate tax to avoid higher taxes where the business mainly operates.

Singapore’s corporate tax rate of 17 per cent is among the lowest in the world.

If United States President-elect Donald Trump has his way, the US corporate tax rate will be slashed from 35 per cent to 15 per cent.

As tax havens generally have low taxes, Singapore is often viewed as a tax haven.

Mr Chris Woo, tax leader at PwC Singapore, is adamant the Republic is not a tax haven.

“Singapore has always had clear law and regulations on taxation. Our incentive regimes are substance-based and require substantial economic commitment. For example, types of business activity undertaken, level of headcount and commitment to spending in Singapore as well as projected growth in Singapore,” he said.

Mr Chester Wee, partner of international tax services at Ernst & Young Solutions, noted that Singapore adopts tax policies that enhance economic competitiveness and attract foreign direct investments.

He added: “Singapore’s tax incentive programmes come with strict substance-based conditions such as headcount requirements, local business spending and value-added activities.”

The MOF also said Singapore has been working with the global community to combat tax evasion.

In recent years, the Organisation for Economic Cooperation and Development and G-20 have started a project encouraging tax authorities to set standards to help clamp down on Beps, and Singapore has provided input since 2013.

The MOF added that since June, Singapore has joined another plan to “work with other participating jurisdictions to ensure the consistent implementation of measures under the BEPS Project, and a level playing field across jurisdictions”.

An earlier international review this year also rated Singapore and Switzerland as “largely compliant” in tax matters.

The MOF noted that Oxfam cited a “lack of withholding taxes as one of the characteristics of our regime”.

“This is inaccurate. Withholding tax (for example, interest, royalty, services and so forth) is applicable for payments made to non-resident persons,” the MOF spokesman said.

The MOF added that Singapore does not impose withholding tax on dividends owing to its one-tier corporate tax system.

Profits are taxed at the corporate level – as a final tax.

Mr Wee said: “In terms of several other criteria that Oxfam has listed in order to qualify as a tax haven, Singapore is in a better position than many other jurisdictions. The perception of Singapore as a tax haven stands to be corrected.”

rachaelb@sph.com.sg

This article was first published on December 14, 2016.
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Prime Minister Lee Hsien Loong posted a photo of his new PAssion Silver Concession Card on Facebook and Twitter yesterday, joking that he is “now a certified senior citizen”.

PM Lee, who turned 64 in February, added that he is “looking forward” to using his card.

Netizens responded with jokes of their own, along with good wishes.

Facebook user Elaine Chan said: “Dear PM, you may possibly be one of the very few to wear (a) suit and tie for (a) picture on such a card.”

The new PAssion Silver Concession Card, which was launched on Dec 4 this year, merges the existing Senior Citizen Concession Card with the PAssion card.

It is a joint initiative by the Ministry of Health, Ministry of Transport and People’s Association (PA), and is supported by the Land Transport Authority and Singapore Business Federation.

The card is given free to all Singaporeans who are 60 and older, and provides concessionary fares on public transport as well as discounted rates for PA community clubs’ courses, activities and facilities.

Other benefits include 3 per cent discounts at Giant supermarket outlets on Tuesdays and at Cold Storage stores on Wednesdays.

From Dec 5 this year, the card is automatically mailed to the home addresses of those who are currently 60 and older, and who are existing Senior Citizen Concession Card holders.

Those who do not have Senior Citizen Concession Cards will receive a letter by Jan 31, 2017, requesting a photograph submission before they can receive their PAssion Silver Concession Cards.

Seniors who turn 60 next year will receive invitation letters after they become eligible.

lydialam@sph.com.sg

This article was first published on December 14, 2016.
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The outlook for Singapore’s economic growth was trimmed yet again, according to an official survey of forecasters released Wednesday.

The December survey of professional forecasters, sent out in late November, by the city-state’s central bank, the Monetary Authority of Singapore (MAS), found economists turned more bearish since the previous survey.

They expected Singapore’s economy would grow just 1.5 per cent in 2017 on average, down from the September survey’s forecast for 1.8 per cent and the June survey’s projection of 2.1 per cent.

The latest forecasts for 2017 growth ranged from 0.7 per cent to 2.3 per cent.

The December survey, which had 22 respondents, doesn’t reflect the MAS’ own forecasts.

Read also: Over 13,000 laid off in first 9 months of 2016, highest since 2009: MOM

In a statement released December 2, the MAS said it expected Singapore’s gross domestic product (GDP) would rise by 1-3 per cent in 2017 after rising an estimated 1.0-1.5 per cent in 2016.

Singapore’s small, open economy has been buffeted by declines in global trade as well as its exposure to sharp drops in commodity prices.

Redundancies in the first nine months of the year hit their highest since the first nine months of 2009, during the global financial crisis, government data earlier this week showed.

The forecasters expected the headline consumer price index (CPI) would rise 1.0 per cent next year.

The survey found the Singapore dollar was expected to weaken further against the greenback, with the average forecast expecting the US dollar to be fetching around 1.465 Singapore dollars at the end of 2017. The forecasts ranged from 1.37 to 1.55 Singapore dollars. At 12:06 p.m. HK/SIN, the greenback was fetching S$1.4255.

Read also: ‘Technical recession’ looms for Singapore

In the survey, the forecasters also cut their outlook for this year’s growth to 1.4 per cent from 1.8 per cent in the September survey. That followed third-quarter growth coming in weaker than expected at 1.1 per cent on-year, below the September survey’s forecast of 1.7 per cent.

The forecasts for 2016 growth ranged from 1.1 per cent to 1.6 per cent.

The economists now expected the finance and insurance sector would grow just 0.5 per cent in 2016, down from 2.0 per cent in the previous survey. They also cut the wholesale and retail trade growth forecast to 0.1 per cent for 2016, down from the September survey’s 2.1 per cent growth forecast.

The private consumption growth forecast was cut to 1.4 per cent for this year, down from 3.0 per cent in the September survey.

The headline consumer price index was expected to fall 0.5 per cent for the full year, with the forecast unchanged from September.

For the fourth quarter of 2016, economists expected just 0.6 per cent on-year growth on average, with a median forecast of 0.8 per cent. The forecasts ranged from a 0.6 per cent contraction to 1.4 per cent growth.

Read also: Singapore malls are dead as retail occupancy reaches lowest levels in 10 years