I delivered the following 2 speeches during the Ministry of Finance’s Committee of Supply debate today.
Life Insurance Tax Relief
Sir, currently taxpayers can claim tax relief on premiums paid for life insurance if their CPF contribution is less than $5,000. This $5,000 ceiling was last raised from $4,000 in 1979, 35 years ago. That increase was to ensure that the lower-middle income earners continue to benefit from the concession.
Income levels have changed a lot in 35 years. Many working Singaporeans are not able to enjoy this concession while their foreign counterparts can because they do not contribute to CPF. I hope the minister can review this scheme to raise the ceiling to a more appropriate level so that the lower-middle income earners of today can benefit and will be encouraged to save more for their old age.
Merger and Acquisition Scheme
Sir, I refer the Minister to my Budget speech. I had spoken quite extensively about encouraging M&A as it can help raise our productivity and global competitiveness. The current M&A scheme has not been well utilised and is meaningful only for larger acquisitions.
I hope the Minister can review the provisions in the M&A Scheme to encourage more M&A activities amongst SMEs through targeted measures. This can include higher allowances for smaller M&A transactions. It can also cover purchase of operations and businesses of SMEs rather than outright share sales, as the acquirers may be wary of potential liability associated with small companies. Acquirers who invest in automation of their acquired businesses to achieve greater productivity and to change old business models could be rewarded with more generous PIC incentives or special grants.