Singapore Budget 2020 – Top 5 things you need to know if you are a business owner in Singapore
With the recent Singapore 2020 budget announcement earlier this week, here's a list of top 5 things you need know if you own a business in Singapore or are planning to set up business operations here.
1. S$800 million committed for frontline operations battling Covid-19
A series of schemes have been introduced which intend to support frontline operations dealing with the Covid-19 outbreak, as well measures to cushion the impact on the economy, and to help sectors which have been hit most heavily by the viral outbreak.
The bulk amount allocated, which is on top of the substantial resources already committed each year to public health, will be allocated to the Ministry of Health (MOH) to tackle the outbreak.
Support for sectors hit by Covid-19
The five sectors directly affected by the Covid-19 will get additional support as well.
They are tourism, aviation, retail, food services, and point-to-point transport services.
Here are more details regarding the support given:
Food services and retail business
A 15% Property Tax Rebate will be granted for qualifying commercial properties.
- A Temporary Bridging Loan Programme will provide for cash flow support
- There will be up to 30% Property Tax Rebate for 2020
- Rental rebates will be provided for shops and cargo agents at Changi Airport
2. GST is not increasing in 2021
Good news! GST will not be increasing in 2021. This means the GST rate will remain at 7 per cent in 2021.
However, Deputy Prime Minister and Finance Minister, Heng Swee Keat has stressed that the hike may be needed by 2025.
3. Assurance Package
Although GST will inevitably rise by 2025, the government will provide support to buffer Singaporeans against the impact of the increase.
When it is raised, a S$6 billion package will be instituted to help Singaporeans.
The funding for this package will come from this year’s Budget.
4. Stabilisation and Support Package
The Stabilisation and Support Package, which amounts to S$4 billion, will help stabilise the economy and support the country’s workers and enterprises by helping workers stay in their jobs, and help enterprises with cash flow.
To help workers stay employed, their wage cost will be defrayed through two schemes:
1) Jobs Support Scheme
A Jobs Support Scheme will be introduced to help enterprises retain their local workers.
- For each local worker in employment, the ministry will offset 8% of the wages, up to a monthly cap of S$3,600, for three months.
- The amount will be given to employers by the end of July in 2020.
The scheme, covering 1.9 million local employees in Singapore, will cost the government S$1.3 billion
2) Wage Credit Scheme
To support wage increases for local employees, the Wage Credit Scheme will be enhanced.
- The monthly wage ceiling for Singaporean employees will be raised from S$4,000 to S$5,000 a month, for qualifying wage increases given in 2019 and 2020.
- The enhancements, amounting to S$1.1 billion, will go to about 90,000 enterprises, benefiting more than 700,000 local employees.
Corporate Income Tax Rebate
Under the Stabilisation and Support Package, economy-wide support to help enterprises with cash flow will be given too.
- For instance, a Corporate Income Tax Rebate for Year of Assessment 2020 will be granted at a rate of 25 per cent of tax payable, capped at S$15,000 per company.
- The rebate will benefit all tax-paying companies, and cost about S$400 million.
5. Senior Worker Support Package
A Senior Worker Support Package has also been introduced to support lifelong employability. In line with enterprise transformation and upskilling of local workers, there will be reduction in reduce the S-Pass sub-Dependency Ratio Ceilings for the Construction, Marine Shipyard and Process sectors from 20% to 15%.
For full details on the budget, please visit the Singapore Government website.