Commentary

The global financial crisis (GFC) gave employers a breather from the skills shortage - there were a large number of candidates available and so employers wanted proven performers. Now, in line with the market’s steady recovery, the number of highly skilled candidates has reduced and skills shortages are starting to emerge. A number of sectors such as Accountancy & Finance, Banking and IT are experiencing a shortage of highly skilled and specialised candidates. The good news for employers is that there are steps you can take towards minimising the impact. 1. Train entry-level candidates: There was very little investment in recruiting and training entry-level candidates during the financial downturn as employers opted for proven performers. Graduates and less experienced candidates are often highly motivated and work hard to prove their ability, making them a valuable commodity. 2. Consider transferable skills: Don’t immediately turn away a candidate because they don’t have industry specific experience. If the applicant is from a related field, for example from other heavy infrastructure projects, check to see if their skills are transferable. 3. Consider overseas candidates: Singapore is fast becoming a hub for global business. Combined with the global nature of the oil and gas industry, you might consider talent from other countries. 4. Look ahead: We also advise employers when recruiting to look ahead at what a candidate can offer in the coming three to five years, rather than just the next two years. This will also have a positive effect internally, with staff valuing the potential for future opportunities with their employer. 5. Partner with a recruiting expert: As economic conditions continue to improve, competition for the best talent will only increase. Finding the right candidate with the necessary skills and experience will take significant time and resources. Working with a recruitment firm will save you time, money and effort.

Julia Smith, Singapore Practice Leader for Performance & Reward, Ernst & Young, shares the concerns in the boardroom on executive pay and the shifts in approach to Board governance.

Globally we have seen financial institutions teetering on the brink of collapse, global brand names erased from the highstreet ….along with the highstreet themselves in many cases. We have seen many governments incur historically unheard of deficits, off the scale borrowing and decimating forests in their haste to print more money. As if the financial crisis wasn’t enough, we have also had to witness major natural disasters in the form of earthquakes in Haiti, floods and mud slides and some of the worst blizzards since records began sweeping across Europe and the US.As if that wasn't enough……along comes the movie 2012! You could be left wondering what the world is coming to!I don’t believe we are sufficiently experienced to answer that question today but we can consider the budget and whether Singapore truly is on the road to recovery. By all accounts, Singapore has weathered the storms well. Judging from the tenor of this year’s Budget speech, the general outlook is the storms have passed. The implementation of the Resilience Package helped kept confidence up and infused a much needed stability to businesses, labour and the economy.But is the worst really over?A significant amount of uncertainty hangs in the air judging by economic data coming out of the G3 countries. The Singapore Ministry of Trade and Industry has revised short term growth forecast from 3 to 5% to 4.5 to 6%. The thrust of Budget 2010 was clear in the need for Singapore to increase productivity and upgrade the quality and competitiveness of the small and medium enterprises.Is this achievable given Singapore inter-dependence on international trade?Many of the tax changes in the budget focused on this key productivity theme with tax concessions around R&D and incentives for spending in this area. Some of the things we have been asking for finally made an appearance in this budget showing the Government responds to feedback and initiatives. Sadly for some, this didn’t include any reduction in the personal tax rates or tax band. On the contrary, there appeared to be a concerted effort to subtly refocus the tax burden to those who can most afford it.So what are some of the specifics in this year’s budget, how will it benefit companies? Much of the budget detail is still to be revealed in the months ahead, and many of these will require further clarification. In the meantime, if you didn’t get anything on your wish list, you can at least drown your sorrows with the additional duty-free allowance for wine or beer from 1st April 2010!

As Singapore shifts its focus from achieving mere industrialisation to becoming a world class economy in the next decade, tax measures which encourage high value-adding activities and greater intensification of industrial land use are called for to support the progressive restructuring of the economy.

Given Singapore’s desire to become an international financial centre, the lack of significant new incentives to grow the industry was surprising.

By and large, Budget 2010 contained nothing very significant for individual taxpayers.

The Minister mentioned that property tax is a means of redistribution in our society, together with our income tax regime.

Singapore has long put in place favourable tax incentives targeted at traditional shipping businesses. As part of the Government’s continuing efforts to promote Singapore as a maritime hub, recent Budget announcement has proposed to further enhance the existing shipping incentives and to introduce new incentive. Extension of Maritime Finance Incentive (MFI)The MFI offers alternative financing solutions to shipowners by allowing ship or container leasing companies, funds, business trusts or partnerships to enjoy the following tax incentive for a period of up to ten years:• A full tax exemption or concessionary tax rate of 5 percent or 10 percent on qualifying income derived by an approved MFI entity;• A concessionary tax rate of 10 percent on qualifying income derived by an approved manager.Originally set to expire on 28 February 2011, the expiry date of MFI has been extended from 28 February 2011 to 31 March 2016. However, applications made after 1 March 2011 will only enjoy an incentive period of not more than five years.However, the incentive period of five years may not be sufficient to provide certainty to taxpayers in the maritime industry where the capital investment is generally huge and the related tax cost is significant. Tax Incentive for Ship Brokers and Forward Freight Agreement (FFA) TradersIn general, Ship brokers and FFA traders are taxed at the prevailing corporate income tax rate. A concessionary tax rate of 10 percent for a period of five years is accorded to qualifying companies that solely carry on a business in ship broking and/or FFA trading. To enjoy this tax incentive, companies have to apply to the Maritime and Port Authority (MPA) between 1 April 2010 to 31 March 2015. Further details would be released by the MPA by end March 2010.From the recent global financial turmoil, it is clear that the shipping industry is not insulated from the consequences of financial crisis. Freight rates become volatile when demand for global trading drops. Generally, FFAs (which essentially are paper freights or option contracts on freight rates) allow parties to the agreement to take a position in a paper freight (futures) market as a substitute for physical or cash transaction. Thus FFAs offer ship owners, operators and charterers a tool of insurance and management against the volatility of freight rates. The incentive reflects the Government’s recognition of the importance of risk management to the growth of the shipping industry. However, it remains to be seen what conditions ship brokers and FFA traders must meet to qualify for the tax incentive. Tax Exemption On Ship Management Fees Currently, ship management fees do not enjoy tax exemption and is taxed at the prevailing corporate income tax rate unless it qualifies for concessionary tax rate under the Approved Shipping Logistics Enterprise scheme. Under the proposal, the scope of tax exemption under Section 13A of the Income Tax Act (ITA) and Approved International Shipping (AIS) scheme would be extended to cover qualifying income derived from the rendering of ship management services to qualifying related Special Purpose Vehicles (SPVs). This extension is a long-awaited welcoming leap for the shipping industry and is in line with the aim to promoting growth of the ship management industry in Singapore. No details are currently available as to what would constitute qualifying related SPVs. Further details are expected to be released by the MPA by the end of March 2010.”Land Intensification Allowance (LIA)The introduction of the LIA is also consistent with the Government's call to achieve higher productivity and efficient land use. However, the importance of aligning the qualifying industries and the qualifying criteria with the Government's focus in promoting Singapore as a business hub for various industries should not be underestimated. In this respect, the inclusion of other sectors such as port, warehousing, transportation and logistics support into the existing nine qualifying industry sectors should be considered. This is crucial as cost effectiveness and operational efficiency are vital to maintaining and improving Singapore's world-wide ranking as one of the busiest ports.The writer is an Executive Director of KPMG Tax Services in Singapore. The views expressed herein are those of the author and do not necessarily represent the views of KPMG in Singapore.

Currently, 7 percent Goods and Services Tax (GST) is payable on all importation of goods into Singapore at the time of import. The exception is when import relief is granted or GST is suspended under approved GST schemes, such as the Major Exporter Scheme.

In this year of the Tiger, the Singapore Government has chosen not to be a leaping Tiger in an attacking mode but a crouching Tiger, strategizing and positioning for the bigger prize of sustained, long-term economic growth.

As Singapore gears itself towards improving land productivity, the industrial building allowance (IBA), which was first introduced in the 1940s to encourage industrialisation, will be phased out.

PricewaterhouseCoopers LLP Asia Financial Services Leader Dominic Nixon talks about the Banking Banana Skin Survey 2010 and what bankers in Asia fear the most.

The bottled water industry has figured out how to get to consumers and it’s through their hearts. Unlike banking which asks consumers to focus on the details of each product, bottled water successfully taps into the emotions of consumers by associating their product with the ideas of taste and style creating a consumer attitude towards bottled water based on their emotions and not logical comparisons of product features and benefits.