By madmin 
A government-led review group in Singapore has proposed a series of tax incentives with a view to drawing firms and fund managers to the city-state for an IPO. The proposals were made public by the Monetary Authority of Singapore on Thursday, February 13, 2025, as the market is fighting for low liquidity and the scarcity of new listings.
“These measures are actually aimed at boosting the growth as well as promoting the promotion of large funds that have a larger part in the targeted stocks”, said the spokesperson of the group. It is a crucial step in the rejuvenation of a market that has been going through difficult times so far. The Singapore Exchange (SGX) has experienced struggles in recent times in terms of a slump in the number of newly listed securities and trading volumes.
For a long time, the industry experts have been criticizing the slump of Singapore’s equity market that has been losing its appeal to both domestic and international investors. The present tax relief is projected to build a friendly backdrop for companies going public thus ensuring companies jettison the overseas option or the private one might be turned around.
The declaration has received a cautious yes from the market participants. Majority considers it as a good step towards correcting the existing structural issues that have slowed down the growth of Singapore’s equity market. Nevertheless, a few analysts believe that tax incentives alone will not be enough to solve all the problems faced by the SGX.
Is the proposal one of the main focuses of the city on fund managers brought to Singapore? By allowing funds higher entitlement rates to local equity division, the government wants to deepen and add a volume of liquidity in the market. This transformative effect can bring more companies that want to be listed to the exchanges that, in turn, will attract more investors.
The timing of this announcement gains additional weight as it is now only a few days left before the government will start the delivery of the FY2025 Budget Statement of Singapore. The Prime Minister and Minister of Finance, Lawrence Wong, are planning to give the announcement on Tuesday, February 18, 2025 at 3:30 PM in Parliament. This development has led to discussion that these tax incentives for the stock market could be part of the wider strategy of Singapore being a global financial hub strengthening a speculating trend.
Said measures are raised at a time when Singapore is surrounded by increased rivalry from other financial centers in the region. With recent downturns, Hong Kong still remains a strong competitor, and new markets such as Vietnam and Indonesia are progressively gaining the eye of the investor. The tax incentives may be considered market parts in Singapore’s efforts to retain its competitiveness in the global financial landscape.
Even though the specifics of the tax incentives have not emerged, market watchmen are already trying to forecast their potential impact. Some of them argue that the same instruments have been useful elsewhere, like in Hong Kong’s case with tech giant listings. Others, nevertheless, fear that the tax incentives alone may not address the core problems bothering Singapore’s stock market.
The efficiency of these interventions will probably predetermine by their enforcement and, also, by any other reforms made alongside with them. Some experts claim that the listing requirements should be reconsidered, the corporate governance standards should be made higher and more efforts should be taken to attract a wider variety of companies to be a part of SGX.
As the government moves forward with these proposals, all eyes will be on the upcoming budget announcement for more details on how they intend to support and grow the financial sector. The introduced tax incentives for the stock market need not be the sole measure, and instead, it might be just the first blow of a more comprehensive approach to place Singapore at the center stage of a leading financial hub In Asia and beyond.