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Singapore cuts corporate taxes to 17%

SINGAPORE cut corporate taxes for the second time in three years and increased spending to a record high to help drag the island's economy out of its deepest recession since independence.

The government will reduce the maximum tax rate payable by companies to 17 percent from 18 percent, Finance Minister Tharman Shanmugaratnam said in a budget address to Parliament yesterday. It will also spend S$20.5 billion (US$13.7 billion) on property and personal tax rebates and cash handouts to help businesses and workers, Bloomberg News reported.

Singapore is speeding up its response to the global slowdown as companies on the export-dependent island fire workers amid ebbing demand for goods and services. The tax cut will narrow Singapore's gap with Hong Kong as Prime Minister Lee Hsien Loong's government aims to attract investment in services and manufacturing industries.

Singapore's economy may contract as much as 5 percent this year, after growing 1.2 percent in 2008, the trade ministry said on Wednesday.


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