The Ministry of Finance (MOF) budget for 2020 puts a large focus and resources to help businesses and industries meet the latest challenges.
Singapore's economy grew a modest 0.7% in 2019, the weakest growth since the 2008 financial crisis.
Just as the global economy started to recover, the COVID 19 outbreak occurred unexpectedly last month, Finance Minister Heng Swee Keat said, bringing "new uncertainties".
In response, many of the initiatives announced in this year's budget are aimed at protecting local workers' jobs as a "prime concern", followed by helping cash-flow companies to get through the difficult season.
The government has one S $ 4 billion stabilization and support package This will help to implement a wide range of measures.
Here's what businesses in Singapore can take with them.
Pay wages for employers
To ensure that Singaporeans stay busy, there is a new one Jobs Support Scheme is introduced to subsidize local workers' wages.
Employers receive a cash subsidy of 8% of the monthly salary of each worker for three months up to a monthly ceiling of S $ 3,600. This applies to employees who are Singaporeans or permanent residents.
This corresponds to a total payment of S $ 1.3 billion that employers will receive by July 31, 2020.
An existing one wage credits will also receive a $ 1.1 billion increase to support local worker salary increases.
The program will now co-finance 20% of wage increases in 2019 and 15% of wage increases in 2020 for Singaporean workers with gross monthly income of up to S $ 5,000.
Corporate tax breaks and working capital loans
All taxable companies receive one 25% corporate tax rebate limited to S $ 15,000 per company for the 2020 valuation year.
Companies can also expect improved tax treatment for a year, including faster depreciation of investments in machinery and equipment, and renovation and refurbishment for the 2021 tax year.
To make it easier for companies in Singapore to access working capital, the Enterprise Financing Scheme offers Operating loan will double its maximum loan volume to S $ 600,000.
The government will assume 80% of the credit risk, which will increase from the current 50% to 70%.
In addition, tenants and tenants of government-owned properties can request more flexible rental payments, such as installment plans, which have to be approved on a case-by-case basis.
Additional support for sectors most affected by COVID-19
Budget 2020 identified Tourism, aviation, retail, food and point-to-point land transportation as the sectors most directly affected by the COVID 19 outbreak. These sectors receive additional help in addition to the measures mentioned above.
Companies in these five sectors will have an extended funding period for employee retraining, which is extended from three months to a maximum of six months.
In tourism, hotels, serviced apartments and event locations can expect a 30% reduction in property tax on their accommodation and event rooms for 2020.
Rental discounts are also being introduced for businesses at Changi Airport, while the airport itself receives a 15% property tax discount.
Previously announced, taxi and private rental companies will receive a $ 77 million support package to deal with the downturn.
In the retail and food industries, street vendors and commercial tenants in state-run facilities receive a monthly rent waiver and half a month waiver.
S $ 300 million reserved for deep tech startups
According to the Global Startup Ecosystem report, Singapore's startup ecosystem is among the top 15 worldwide.
There are around 3,800 technology startups and around 150 venture capital funds in Singapore that invest in local and regional startups.
This year the government will improve support for deep tech startups in emerging technology areas such as pharmbio and medtech, advanced manufacturing, and agricultural and food technology.
To catalyze investments in deep tech startups, Another $ 300 million will be made available through the startup SG Equity,
According to Heng, the government expects more than $ 800 million in private funds to be raised over the next 10 years.
Helping businesses grow and change
In addition to startups, Minister Heng said that many companies want to grow.
The government is new Enterprise grow package will support companies in the innovation and introduction of digital solutions and support their ambitions to open up new markets.
Companies can use a new platform GoBusinessto access streamlined license applications and simplify government transactions.
To help more SMEs build their digital skills, more companies can benefit from step-by-step instructions under the SMEs go digital system which will be expanded to 13 other sectors.
Companies in Singapore that want to expand can rely on an improved company Market Readiness Assistance (MRA) grantincreased from S $ 20,000 to S $ 100,000 annually per new market and company between fiscal years 2020 and 2022.
ON one-time S $ 500 SkillsFuture top-up is provided to every Singaporean over the age of 25 to help workers develop new skills.
Top-up will be available from October 1st this year and will remain valid for five years until 2025.
To support the retraining, each Singapore aged 40 to 60 will receive an additional SkillsFuture loan of S $ 500 this year. This can be used from October 1st for around 200 career transition programs from CET centers.
Businesses will also benefit from the government's investment in the "next SkillsFuture frontier" with a new SkillsFututre Enterprise Credit.
According to Mr. Heng, this should encourage employers to work together to transform their workforce and their company.
Each company receives S $ 10,000 to "cover 90 percent of the cost of business transformation, job reshaping, and training," he added.
Support in hiring older workers And people with disabilities
In order to support workers who intend to work or who need to stay longer, employers who hire older workers are given funds to offset the cost of their wages.
A new Senior Worker Support Package includes: Senior employment creditThis helps employers to balance up to 8% of wages, depending on the age of the worker.
This applies to Singaporean workers aged 55 and over who earn up to S $ 4,000 a month.
Currently, the highest wage compensation is allocated to employers of workers aged 67 and over. This will be increased to 68 years on July 1, 2022.
This new regulation applies for two years from January 1, 2021 to the end of 2022.
Employers will also receive a transitional CPF compensation to cover half of the increase in their contribution rates for older workers next year up to the $ 6,000 CPF ceiling.
In addition, a new one Activate the employment loan program will also offset wages if employers hire people with disabilities. It will be available for five years from 2021 to 2025.
Foreign employee tax
The government will be Reduction of the quota for foreign skilled workers over the next three years in the construction, shipyard and process sectors to encourage companies to hire more Singaporean skilled workers and technicians.
According to Heng, the upper limit for the dependency ratio (DRC), which relates specifically to S-Pass holders, will be reduced from the current 20% to 18% by January 1, 2021 and to 15% for these three industries on January 1, 2023 ,
The entire Democratic Republic of the Congo, which refers to the total foreign employment rate for all classes of ID cards, remains the same at 87.5% for the construction and process sectors and 77.8% for the shipbuilding sector.
This means that companies in these sectors can hire less skilled foreign workers or work permit holders because only the skilled foreign worker quota is reduced.
The government intends to reduce the number of skilled foreign workers in manufacturing, but only "if conditions permit," said Heng.
With manufacturing shrinking due to economic uncertainties, he said the government decided not to lower its foreign worker quota at that time.
Foreign worker taxes for all sectors, including tourism, food and beverage and retail, which have been severely affected by the COVID 19 outbreak, remain unchanged.
Delayed increase in GST
Many Singaporeans have (unwillingly) held their breath to know if the tax on goods and services (GST) will increase next year.
Minister Heng announced this The GST will remain at 7% in 2021given the current economic challenges.
If you're not hit with a GST boost for now, it likely means that consumers are more willing to spend and support businesses.
Minister Heng, however, emphasized that the increase cannot be postponed indefinitely and will be necessary until 2025.
The government would carefully consider the appropriate timing for the GST increase, and Singapore would be given "sufficient lead time" for the change, he added.
Selected image source: Gov.sg.