[ CNA ] Tougher competition but Singapore will take it in stride: PM Lee on G20’s corporate tax deal

“I think it is an effort by countries to come together to be able to have a united front in improving the bargaining position against companies which have very considerable pulling power,” he said.

“I think I can understand what they are trying to do, but I think the dynamic will not fundamentally change and countries will find other ways to make themselves attractive in order to get their investments and the projects which they want.”

Mr Lee said the minimum tax rate will impact how Singapore attracts investments to its shores, as tax incentives have been “one of the major tools” used by the Economic Development Board, together with grants and other schemes.

“We will have to see how those will have to be modified but we will also have to see how we can continue to attract investments to come to Singapore in order to create jobs and in order to keep ourselves competitive,” he added.

Mr Lee said “it is very hard because we are now talking not only about economic competitiveness, but also strategic and security considerations”, adding that supply chain resilience and “how to make sure that you are not held hostage in case your main supplier turns unfriendly, or in case something happens along the supply lines” also featured in discussions.

The tax reform, brokered by the OECD and backed by around 136 countries representing more than 90 per cent of world GDP, has long been in the making, and is supposed to come into effect in 2023. Each country taking part in the global deal must first pass national legislation.

DPA Notes: This is a massive massive development, because this would mean the end of tax haven for companies, and any country that would not play ball with G20 is likely be on the receiving end of punitive actions.