Singapore yesterday took steps to become the Asia Pacific's dominant financial centre by announcing more tax incentives as part of its 1999-2000 budget which is expected to put government coffers S$5.05 billion (about HK$22.66 billion) in the red. Despite economic hard times, Finance Minister Richard Hu Tsu Tau has refrained from cutting Singapore's basic corporate tax rate, but instead aimed relief at nurturing industries that fit in with the republic's long-term development strategy. Its fledgling bond market and boutique fund management industries are prime beneficiaries. Singapore's personal income tax rate also remains unchanged, but a flat 10 per cent rebate for all has been extended for a second year to help residents cope through what Mr Hu described as 'this temporary difficult period'. Some additional relief will also be given to some public housing tenants. To lure more multi-nationals, Mr Hu announced he would extend a concessionary 10 per cent tax rate to all firms servicing the region from Singapore so long as they perform at least one substantive global function out of the city-state. This incentive had previously been limited to only a select number of qualifying firms. Mr Hu said the move was 'to encourage firms to locate and perform their headquarters function in Singapore to service network companies worldwide'. The incentive will take effect from next year and be valid for a maximum 10 years. Mr Hu announced incentives to boost Singapore's boutique fund management industry as part of its on-going drive to challenge Hong Kong as East Asia's pre-eminent financial hub. Income derived by foreign investors from funds managed by qualifying boutique fund managers will become tax exempt. Mr Hu told parliament: 'Since the early 1990s, fund management activities have grown rapidly. 'Compared to 1991, there has been a fivefold increase in the amount of funds managed in Singapore to $124 billion in 1997. This is expected to grow further.' Even so, Hong Kong's fund management industry remains significantly larger. Among the slate of measures to boost the bond market, Mr Hu said he would exempt primary bond dealers from income taxes derived from trading Singapore government securities as it was important for the city-state to develop a liquid bond market with benchmark yield curves. Singapore's fast growing chemicals industry was another beneficiary, with tax exemptions granted to income derived from operations of floating production storage vessels. These are primarily converted crude oil tankers deployed in offshore fields for production storage of crude oil. Mr Hu said: 'The development of this industry would not only serve the shipping [industry] but would also complement Singapore's role as the world's third largest oil refining and trading centre.'