Pre-Budget 2019 Perspectives - Technology


Exploiting the Internet of Things in Everything.




THE SITUATION

IoT (Internet of Things) is a significant growth area, and can be a key enabler in Singapore’s Smart Nation vision with asset monitoring and maintenance across the utilities, logistics, transport and industrial sectors. In addition, IoT can also enable advances in security, seamless use of cloud analytics, and rapid device deployment. For example, IoT can help in healthcare with remote monitoring of patients and cognitive computing to better analyse health data, and in transport with demand-responsive shared vehicles and satellite-based road pricing.

Singapore is well-placed to harness the potential of IoT, with its highly-skilled workforce, major infrastructure projects that can be test cases (e.g. Tuas mega port), and high-growth enterprises that could adopt IoT faster for new areas of growth. Data from portals developed by the government (e.g. data.gov.sg) can be shared through real-time Application Programming Interfaces to empower “smart citizens”, while galvanising private sector enterprises to participate more actively.

However, despite all of IoT’s potential as a key Smart Nation enabler, adoption has generally been slow mainly because of high implementation costs, cyber security threats, complexity of integration and interoperability, and lack of skills.


OUR PROPOSALS

IoT is a fundamental building block on our path towards becoming a Smart Nation. It is therefore critical that we encourage the development and adoption of IoT in Singapore.

1. Develop the IoT ecosystem.

  • Foster innovation by setting up a sandbox environment for IoT-related innovation in regulated areas e.g. telcos, similar to the fintech space.
  • Accord 250% tax deduction on costs incurred for bringing in international technology experts and urban planners to pilot projects using Singapore talent, and/or to facilitate local or overseas training for employees.
  • Establish a Smart City Hub programme in Singapore to provide technology, capital, talent and advisory services to deploy Smart City programmes in Malaysia, Indonesia, Thailand and Myanmar, by providing a concessionary tax rate of 10% for qualifying businesses deriving income from deploying Smart City programmes overseas. Singapore, as a leading Smart City in the region, can then attract new technology companies to set up their global/regional headquarters here, thereby laying the foundation for Singapore to be recognised as the “Silicon Valley city” of the region.
  • Co-fund up to 50% of R&D-related costs incurred by businesses under Public-Private Partnerships (PPPs) to drive IoT initiatives aligned with Industry 4.0 (e.g. urban mobility solutions, autonomous technologies), to encourage adoption in vertical industries like manufacturing and smart public transport.
  • Prioritise projects backed by “smart capital” from technology funds, consortia investments, and private equity with a pedigree in large-scale public-benefit technology project implementation, by extending the Angel Investor Tax Deduction Scheme.
  • Enhance training subsidies to organisations and encourage universities to focus on IoT-related curricula around industrial automation, information technology knowledge in networking, analytics and insights into manufacturing or public governance, and technology integration skills.

2. Drive higher IoT adoption.

  • Accord enhanced tax deductions/allowances on expenditure incurred in IoT development (e.g. system and software integration which might not qualify for the enhanced R&D tax deductions), as follows:
    • 250% tax deduction for local spending in respect of payments for prescribed expenses made to Singapore-based service providers/vendors.
    • 200% tax deduction for payments for prescribed expenses made to overseas service providers/vendors.
  • 250% tax allowance on capital expenditure on technology-based investments into approved infrastructure projects aligned with Singapore’s Smart Nation and Industry 4.0 blueprints.
  • Extend the Intellectual Property (IP) Development Incentive with a concessionary tax rate of 5% on qualifying IP income for activities under Smart Nation and Industry 4.0 blueprints.
  • Encourage industry partnerships in Smart Nation projects with a concessionary tax rate of 5% on income from qualifying IoT projects to any consortia that include three or more Singapore-registered businesses.



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