djchris

SINGAPORE: The government should not protect small- and medium-sized enterprises (SMEs) from large and foreign companies.

Doing so would be counter-productive, according to Prime Minister Lee Hsien Loong.

He said it is better for the government to create an overall business-friendly environment for local enterprises to flourish.

As a new council takes office at the Singapore Chinese Chamber of Commerce and Industry (SCCCI), the business community is also voicing its thoughts on how the government should help SMEs.

Some have asked the government to protect SMEs from competition from large and foreign companies amid – what they say – rising business costs.

SMEs have also given the government feedback that it is difficult for SMEs to do business in Singapore.

Mr Lee said: "I disagree with this approach. My view is that it would be counter-productive. It may benefit the companies in the short term, but in the long term, it will sap their vitality and dampen their entrepreneurial spirit. We will end up with uncompetitive local companies, unable to grow locally or to venture abroad.

"The government should not only support and encourage local businesses, but also maintain an open and competitive economy, keep the tax burden light, and create an overall business-friendly tenet which we must keep."

Mr Lee said the government would continue to maximise opportunities for local enterprise to flourish.

But private sector organisations like the SCCCI can play an important role in helping its members adjust and adapt to the business environment.

It can also help its members take full advantage of the wide range of government assistance measures.

Mr Lee said besides the 2 percentage point cut in corporate tax, the government has adjusted the corporate tax structure and reduced the tax burden for start-ups and SMEs.

This means start-ups will not have to pay tax at all in their first three years.

And most SMEs will effectively pay 10 percent or less of tax.

For SMEs, Mr Lee said this is one of the lowest rates in the world.

To help local businesses take advantage of globalisation, the Chamber has restructured its 12 committees.

Chua Thian Poh, President, SCCCI, said: "Our immediate priority is how to take our trade association members and our members to overseas trips and open new markets for them. This month, we're organising the biggest trade mission to the Middle East, and next month we're going to India."

And in May, the Chamber will jointly organise a mission to Russia with its counterparts in Malaysia.

SCCCI is working with the Singapore Indian Chamber of Commerce and Industry on their third joint business mission to seek opportunities in India's fast growing economy.

The Chamber's goal is to deepen linkages both locally and overseas, strengthen relations with foreign government agencies and business organisations, and nurture bilingual and bicultural talents through a 'Mandarin Club'.


- CNA/so

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