On Tuesday, Feb. 18, Deputy Prime Minister and Minister of Finance Heng Swee Keat presented the 2020 Budget and introduced two special packages to provide additional support to help Singaporeans in light of the economic impact of Covid-19.
One of the special packages is the S$4 billion Stabilisation and Support package, which is meant to stabilise the economy and support Singaporean workers and businesses.
Eight per cent rebate off wages from Oct. - Dec. 2019, raising wage ceiling for Wage Credit scheme
The Jobs Support scheme is meant to help businesses retain local employees during this period of economic uncertainty.
All employers, with the exception of government organisations, will receive a cash grant of 8 per cent of the wages of each of their local (Singapore citizen and permanent resident) employees for the months of October through December 2019.
There is a monthly cap on this grant of S$3,600 per employee.
The grant will be computed based on CPF contribution data, and employers can expect to receive these payouts by July 31, 2020.
The Jobs Support Scheme will cost the government S$1.3 billion to cover all 1.9 million local employees.
Heng also announced that the government would be enhancing the Wage Credit scheme, which was introduced in Budget 2013 and extended in Budget 2015 and Budget 2018.
The Wage Credit Scheme supports companies that have invested in increasing productivity, and encourages employers to share those productivity gains with their employees, by co-funding wage increases.
The Budget 2020 enhancement will raise the gross monthly wage ceiling from S$4,000 to S$5,000 for qualifying wage increases given in 2019 and 2020.
It will also raise government co-funding levels for 2019 and 2020 by five per cent, to 20 per cent and 15 per cent respectively.
The enhancements will cost S$1.1 billion, and will go toward helping around 90,000 businesses and over 700,000 employees.
25% Corporate Income Tax rebate
A new Corporate Income Tax Rebate will be made available to all tax-paying companies, in order to help them with cash flow.
The rebate will be 25 per cent of tax payable, and capped at S$15,000 per company.
This rebate will cost the government S$400 million.
In addition, the government will be enhancing tax treatments under the corporate tax system for a year.
These will allow businesses to have a faster write-down of their investments in plant and machinery, and renovation and refurbishment, for their taxes in the year of assessment 2021.
For example, Heng said that hotels can "take advantage of this lull period" to do upgrading work and prepare for the economic rebound.
The government will also be enhancing the Enterprise Financing Scheme's Working Capital Loan component which is applicable to small- and medium-sized enterprises across all industries, by raising the maximum loan quantum from S$300,000 to S$600,000 and increasing the government's risk-share to 80 per cent.
Heng also encouraged tenants and those leasing under government-managed properties to approach the relevant agencies to discuss more flexible rental payments, such as instalment plans.
Focused support for sectors directly affected by Covid-19
Heng also announced additional support for the sectors most directly affected by the virus outbreak.
These five affected sectors are tourism, aviation, retail, food services, and point-to-point transport services.
The government will help employers retain and re-skill their workers by enhancing support to the Adapt and Grow initiative for this year.
The Adapt and Grow initiative was introduced in 2016 to help local workers "adapt to changing job demands, re-skill for new careers, and stay agile for new opportunities".
The enhancement will see the funding support period for redeployment programmes in affected sectors increase from three months to a maximum of six months.
Workforce Singapore will also introduce a number of new programmes to support redeployment.
Together with Jobs Support Scheme, the government will assist employers in training and retaining more than 330,000 local workers.
Heng said that employees in these industries should "make full use of the down time" to up-skill and retrain.
Property tax rebates for tourism sector
Qualifying commercial properties will be granted a property tax rebate.
The following will get a 30 per cent property tax rebate: accommodation and function rooms of hotels and serviced apartments, as well as prescribed meetings, incentives, conventions, and exhibition venues such as Singapore Expo.
International cruise and regional ferry terminals will get a 15 per cent property tax rebate, while integrated resorts, such as Marina Bay Sands and Resorts World Sentosa, will receive 10 per cent property tax rebate.
Rebates on landing & parking charges, property tax rebates for aviation sector
Heng announced that the government would be offering rebates on aircraft landing and parking charges, assistance to ground handling agents, and rental rebates for shops and cargo agents at Changi Airport.
In addition, there will be a 15 per cent property tax rebate for Changi Airport.
Rental waivers for food services & retail industry
NEA will provide one month of rental waivers to stallholders in NEA-managed hawker centres and markets.
Other government agencies, such as HDB, will offer half-month rental waivers to commercial tenants.
In addition, there will be a 15 per cent property tax rebate for qualifying commercial properties.
"I strongly urge landlords to pass this on to their tenants by reducing rentals", said Heng.
Heng referenced the Ministry of Transport's announcement of its point-to-point support package.
The S$77 million support package includes S$45 million from the government, with the remaining amount coming from taxi and private-hire car operators.
He said, "We will continue to monitor the situation closely. If needed, we can and are prepared to do more."
Top photo by Li Yang on Unsplash