A Look at Economic Events in and Around Singapore

Every week we take a look at the latest news that is going on in or around Singapore. In today’s article, we’ll be looking at a new agreement between US and Singapore regarding the sharing of tax-related information to aid the former’s fight against tax evasion. We will also zoom in on new partnership opportunities between businesses in Singapore and Taiwan.

Singapore and U.S.A. join forces in fight against tax evasion

Singapore and the US have recently concluded discussions that have led to the Intergovernmental Agreement (IGA) between both nations. The IGA would place Singapore-based financial institutions under the USA’s Foreign Account Tax Compliance Act (FACTA) and force them to provide all information related to US financial accounts to the Inland Revenue Authority (IRAS). The IRAS in turn, would hand the data over to the US Internal Revenue Service.

In a bid to combat tax evasion by American citizens, permanent residents, and entities, the FACTA requires financial institutions based outside the US to submit information related to financial accounts held by US-related account holders.

According to a tax expert that Channel NewsAsia spoke to, the IGA could possibly lead to “greater transparency in terms of information exchange” in the “short and medium term.” In addition, Channel NewsAsia also mentioned how analysts think the IGA can help Singapore in its quest to remove its tax-haven image and fight the flow of illegal funds.

Singapore’s 3 big local banks, which include United Overseas Bank (SGX:U11) and Oversea-Chinese Banking Corporation,(SGX:O39) welcome the IGA and have already made preparations to comply with FACTA.

Singaporean and Taiwanese firms want more collaboration

Business delegates from both Singaporean and Taiwanese firms had recently met in a networking session to “explore possible joint ventures in emerging economies”, according to a report by Channel NewsAsia.

Both economies already have strong ties with Taiwan clocking in last year as Singapore’s sixth largest trading partner and ninth largest export market. However, the Singapore Business Federation sees better opportunities for both if they were to work together more closely as each has different strengths that could compliment the other; Singapore is strong in supply chain management and logistics whereas Taiwan has an ability to innovate and create electronic products that are in demand around the globe.

The potential for close collaboration between Taiwan and Singapore is also strengthened by the fact that Singapore has experience with conducting business in India and that’s knowledge that Taiwan would like to tap into.

On a side note, the Singapore Business Federation (SBF) also considers other South-East Asian markets like Vietnam, Indonesia and Malaysia’s Iskandar region as potential targets for further collaboration with Singapore.

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