WE THANK Mr Edwin Lim ('Ensure Singapore benefits through tighter policing'; Jan 26) who expressed concerns about businesses circumventing Singapore's regulatory laws. We agree that abuses, where they exist, should not be tolerated.

The tax exemption scheme for new start-up companies was introduced in year of assessment 2005 to support entrepreneurship and help local enterprises grow.

Most start-ups benefiting from this scheme are genuine businesses, which go on to contribute their fair share of taxes. The Inland Revenue Authority of Singapore (Iras) has audit programmes in place, and has in fact taken enforcement actions against companies found to have abused the scheme.

Companies which hire foreign workers without a valid work permit or fraudulently increase their foreign worker quotas through the use of phantom workers are liable to a fine not exceeding $15,000; or a jail term not exceeding 12 months; or to both.

Last year, the Ministry of Manpower (MOM) successfully prosecuted 38 individuals and one company for phantom-worker violations. For employing foreigners without valid work permits, five companies and 53 individuals were convicted while 21 foreigners were convicted of working without a valid work permit.

We encourage the public with information on any violations to contact Iras ([email protected]) or MOM ([email protected]). All such information will be kept confidential.

Singaporeans must remain at the core of our open and diverse workforce. To this end, MOM has made a number of adjustments to our employment pass framework.

The EntrePass scheme, offered to allow foreign entrepreneurs to set up businesses in Singapore, was enhanced in 2009 to require local employment.

Qualifying salaries for employment pass and S Pass holders have been raised to ensure Singaporeans compete on a more level playing field with them for employment.

This approach is preferred to introducing quotas at the employment pass level, which will impede employers' ability to hire foreigners with more specialised skills-sets that may be lacking locally.

A revised set of Tripartite Guidelines on Fair Employment Practices was released by the Tripartite Alliance for Fair Employment Practices recently.

The guidelines indicate the reasonable efforts that employers should make to attract and consider Singaporeans for job positions on merit, and to train and develop the potential and careers of Singaporeans.