Singapore must adjust to G7 tax plans, says finance minister

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Singapore, need adjust with other nations if a proposed regime for taxing multinational enterprises is implemented, Finance Minister, Lawrence Wong, said on .

The plans, announced by the Group of 7 (G7) nations last weekend, would set a minimum corporation tax of 15 per cent and multinationals pay tax where their sales are made.

“What we know for sure is that the international rules for corporate taxation change, and all jurisdictions need adjust their tax systems and rules,” Wong said.

The South-East Asian city-state has of the world’s highest living standards, based part on attracting foreign businesses and on its own corporations investing neighbouring countries.

Many multinationals have made Singapore their regional headquarters, drawn part by relatively low 17 per cent corporate tax.

spite of its small size, Singapore regularly features among the world’s ten biggest foreign direct investment (FDI) destinations, according to data collated by the United Nations Conference on Trade and Development (UNCTAD).

However, global FDI fell by around 40 per cent in 2020; UNCTAD said in January, due to the pandemic and related restrictions on businesses.

Wong warned on Monday that the proposed rules should not inadvertently weaken the incentives for businesses to invest and innovate as otherwise; countries all be worse off, fighting over share of a shrinking revenue pie.

Singapore will attend the next meeting of the Group of 20 (G20) in July, where the tax proposals will be discussed, Wong said.