SINGAPORE (Mar 1): The impending GST hike from 7% to 9% in 2021 was a major news point from the recent flurry of Budget-related news. However, a survey of SMEs by DBS shows that three out of four of these local companies are unfazed with the potentially higher costs of doing business.

They see just “moderate” or even no impact on their businesses, thanks to the slew of grants and development funding available such as those under the Productivity Solutions Grant (PSG) and Enterprise Development Grant (EDG), says DBS, citing a poll of 240 of its SME customers.

“SMEs are resilient, and many are known to weather storms and the ups and downs of every economic cycle. The early proposal of the GST hike means that SME owners have enough lead time to plan ahead and ensure that they have the necessary provisions when the tax is finally implemented in 2021,” says Joyce Tee, head of SME Banking at DBS.

“SMEs are the backbone of the Singapore economy, and they need an ecosystem of banks, business partners and different government support plans as they look to grow and flourish not just in Singapore but also beyond our shores,” she adds.

While they are relatively confident of how they can function in their home markets, they are not so sure when it comes to overseas expansion. According to DBS, one in three SMEs surveyed said that the lack of knowledge of new markets were hindering their overseas growth, and 30% of them cited the lack of capital as one of the biggest challenges when executing their regionalisation plans.

However, eight in 10 said that they would be more confident about accessing regional market opportunities, given the right resources such as access to capital and market insights. Some two thirds of the respondents are also wary of double taxation.

“SMEs owners continue to aspire to grow their business regionally and it weighs heavily on their minds. While they are confident of their ability to thrive in their home market of Singapore, some may lack the confidence to compete in new markets,” says Tee.