In preparation for the challenging year in 2020, more than half of companies across all major industries are calling for tax relief in the upcoming Budget 2020 next month, according to the Singapore Business Federation’s (SBF) annual National Business Survey released on Tuesday (14 Jan).
The survey captured that for the purpose of upskilling workers, around 55 per cent of small and medium-sized enterprises (SMEs) and large companies rank rebates and corporate/income tax rate reduction as their two top priorities in the Budget.
Almost of the survey respondents also want support in other aspects such as corporate venturing (47 per cent), easier access to information and resources from government agencies (49 per cent), and incentives for industry-related training (47 per cent).
The SBF annual National Business Survey was conducted from 26 August to 25 October last year and it pooled responses from more than 1,000 companies, as mentioned by SBF in their press release.
After a year filled with uncertainties in 2019 partly due to US-China trade tensions, companies now are looking for relief.
In the survey, 51 per cent of the respondents felt that the local business climate had changed for the worse in the last 12 months. Compared to 2018, the respondents also felt less satisfied with the global and regional business environment.
For 2020, 44 per cent of respondents felt that existing conditions will prevail in this year and 49 per cent expects the business climate to be more challenging. Most are also increasingly worried about the world economic climate.
In addition, other main concerns for this year also include China’s economic slowdown, rising business costs such as raw materials and rentals, rising wages and the uncertainties caused by the US-China trade frictions.
Local businesses also identified the three top challenges in 2020 as finding new or better ways to grow revenue (56 per cent), manpower costs (67 per cent) and business competition (62 per cent).
A particular frustration of local companies is the issues of manpower, according to SBF. Many firms are pressured by the rising labour costs, which is a result of the competition to get the best local talent as well as the government’s stricter policies on hiring foreign talents. 40 per cent of businesses also are finding it difficult to retain and attract young hires.
In the wake of these uncertainties, Singapore firms yet continue to expand their footprints abroad. The survey highlighted that 80% of firms have expanded abroad. Especially among SMEs, these enterprises are becoming more internationalised, 78 per cent in 2019 compared to 68 per cent the year before. As for large companies, 93 per cent have expanded overseas.
According to Teo Siong Seng, SBF chairman, it is important for Singaporean firms to diversify their supply chains and to support sustainable growth and expand overseas to access new markets in order to overcome the limitations of Singapore’s small domestic market.
Mr Teo remarked that, “It is encouraging that our SMEs are extending their global footprints more aggressively despite the economic uncertainty that shrouded 2019.”