Employment Pass application process to be refined

[ScoobyDoes]

well, if the tax contribution of a company is small, it means low margins. if the company is small, i bet the allocations are quite small too, so are the operating costs. as i would not expect these companies to jeopardize their profits paying high wages, i suspect the salaries there are quite low. so 70% of the workforce is probably on low pay.

i would then guess that this continuous and aggressive campaign of promoting "singaporean core" should actually be targeting the mncs, not the smes (i always thought this is what the govt means). but it seems like the first in line are the smes, and this is something i don't understand.

Margins at SMEs are higher than MNCs, they have to be - they need to make more money per item sold to cover costs. Large MNCs can typically have margins totalling low single figures based on high volumes. This is especially true in consumer electronics type businesses where I know inter-company margins can typically be below 0.5% still pushing increasing profits. On this basis you also need to be careful about the field of business of a MNC because the likes of Canon/Samsung/Google is different from Airbus/Ford that are equally cast MNC.

O&G and Offshore, whilst typically also MNC based (Shell/BP/Haliburton etc.), is also a different calculation but typically here suppliers to the market also have higher margin.

It doesn't mean to say that Profits Tax from MNC doesn't make up the larger portion of taxes collected because, for sure, it will.

On the salaries front there is equal likelihood SMEs pay as much as MNCs purely to retain staff. Retraining, as a cost, is higher per head for SMEs so the loss of one person has a higher impact than in a MNC, who might even have an internal training program.

[ecureilx]

Margins at SMEs are higher than MNCs, they have to be - they need to make more money per item sold to cover costs. Large MNCs can typically have margins totalling low single figures based on high volumes.

There was a time when above was true. Where (in IT services) large MNCs didn't bid for projects less than 6 figure.

And then a couple of years ago a 2 letter IT services company was submitting quotes for installation of 1 x Checkpoint Firewall. Just installation.

[Barnsley]

well, if the tax contribution of a company is small, it means low margins. if the company is small, i bet the allocations are quite small too, so are the operating costs. as i would not expect these companies to jeopardize their profits paying high wages, i suspect the salaries there are quite low. so 70% of the workforce is probably on low pay.

i would then guess that this continuous and aggressive campaign of promoting "singaporean core" should actually be targeting the mncs, not the smes (i always thought this is what the govt means). but it seems like the first in line are the smes, and this is something i don't understand.

Margins at SMEs are higher than MNCs, they have to be - they need to make more money per item sold to cover costs. Large MNCs can typically have margins totalling low single figures based on high volumes. This is especially true in consumer electronics type businesses where I know inter-company margins can typically be below 0.5% still pushing increasing profits. On this basis you also need to be careful about the field of business of a MNC because the likes of Canon/Samsung/Google is different from Airbus/Ford that are equally cast MNC.

O&G and Offshore, whilst typically also MNC based (Shell/BP/Haliburton etc.), is also a different calculation but typically here suppliers to the market also have higher margin.

It doesn't mean to say that Profits Tax from MNC doesn't make up the larger portion of taxes collected because, for sure, it will.

On the salaries front there is equal likelihood SMEs pay as much as MNCs purely to retain staff. Retraining, as a cost, is higher per head for SMEs so the loss of one person has a higher impact than in a MNC, who might even have an internal training program.

Do any of the MNC's here pay anything but a token tax here?

I was under the impression that the MNC's that come here do so on the back of not having to pay any taxes for a certain period of time.

Isn't their main contribution the extra income tax from the workers?

[ScoobyDoes]

Do any of the MNC's here pay anything but a token tax here?

I was under the impression that the MNC's that come here do so on the back of not having to pay any taxes for a certain period of time.

Isn't their main contribution the extra income tax from the workers?

Slightly off.......MNCs set up here because Profits Tax in general is one of the lowest in the world. Together with HK and Dubai we have a huge magnifying glass above us where all other countries look through to try and trace their own lost taxes.

One customer of mine here, whilst having subsidiary operations locally for a long time was headquartered in Europe but, albeit belatedly, moved very senior management and domicile to Singapore.

[Barnsley]

Do any of the MNC's here pay anything but a token tax here?

I was under the impression that the MNC's that come here do so on the back of not having to pay any taxes for a certain period of time.

Isn't their main contribution the extra income tax from the workers?

Slightly off.......MNCs set up here because Profits Tax in general is one of the lowest in the world. Together with HK and Dubai we have a huge magnifying glass above us where all other countries look through to try and trace their own lost taxes.

One customer of mine here, whilst having subsidiary operations locally for a long time was headquartered in Europe but, albeit belatedly, moved very senior management and domicile to Singapore.

So as I said they come to pay little tax , and probably employ 100 folk here max??

[ecureilx]

This popped up in Yahoo:

Job vacancies hit record low.

Singapore’s labour market is deteriorating as businesses continue to grapple with slowing revenue growth and rising operating costs.

This chart from BNP Paribas shows that labour demand deteriorated sharply in 2015. Job vacancies fell to 2.4% of total employment at end-2015, their lowest level since 2013 and down from a peak of 3.2% in Q3 2014.

Meanwhile, the number of vacancies per unemployed person also dropped to their lowest level since late-2012.

“Revenues are under pressure from a strong SGD and slower regional growth. Meanwhile, rising wages and borrowing costs are further squeezing margins. Labour market data indicate firms are beginning to buckle under these twin pressures,” BNP Paribas said.

“While vacancies remain high by historical standards, employment demand has clearly corrected over the past year,” the report added.

[calugaruvaxile]

This popped up in Yahoo:

Job vacancies hit record low.

Singapore’s labour market is deteriorating as businesses continue to grapple with slowing revenue growth and rising operating costs.

This chart from BNP Paribas shows that labour demand deteriorated sharply in 2015. Job vacancies fell to 2.4% of total employment at end-2015, their lowest level since 2013 and down from a peak of 3.2% in Q3 2014.

Meanwhile, the number of vacancies per unemployed person also dropped to their lowest level since late-2012.

“Revenues are under pressure from a strong SGD and slower regional growth. Meanwhile, rising wages and borrowing costs are further squeezing margins. Labour market data indicate firms are beginning to buckle under these twin pressures,” BNP Paribas said.

“While vacancies remain high by historical standards, employment demand has clearly corrected over the past year,” the report added.

this was expected, as i see the govt popping up more and more labor-related programs.

anyway, these numbers are a little bit misleading, biased in a "positive" way. if there are 10 IT specialist and a cleaner looking for work, and 1 IT job + 10 janitor jobs on offer, theoretically there's a 1-to-1 match.

[calugaruvaxile]

Do any of the MNC's here pay anything but a token tax here?

I was under the impression that the MNC's that come here do so on the back of not having to pay any taxes for a certain period of time.

Isn't their main contribution the extra income tax from the workers?

take this "don't pay tax" with a teaspoon of salt. as far as i know, there are tax rebates/returns which reduce the final sum. however, the company i work for is still waiting for the first pay of the 2012 "IP-producing tax-incentive" returns .

[calugaruvaxile]

On the salaries front there is equal likelihood SMEs pay as much as MNCs purely to retain staff. Retraining, as a cost, is higher per head for SMEs so the loss of one person has a higher impact than in a MNC, who might even have an internal training program.

well, knowing the no1 sport in sg (job-hopping) i would rather not say much about the efforts to retain personnel.

what i would like to comment on is a slightly different (and dirty) aspect of these things: i personally know prc nationals hired by smes with a "theoretical" wage (reported to mom) and a "de facto" wage (about half, paid in reality). as far as i am aware of, mncs don't do this (they pay whatever is declared). so those smes keep the above-mentioned prc employees pretty much as hostages (they can't do much about it). and the pay for the locals scales from the real wage of the prc national, not from the declared number.

in a perfectly lawful world, what you say is true. but in sg a looot of smes are a little bit dirty, to say the least

[sundaymorningstaple]

Not a lot, but enough to cause a problem for the rest. I know. I'm the HR & Finance Mgr for a medium sized SME +/-150 staff.