⚡️This article covers support packages: the Resilience Budget (the 2nd one released) and the Solidarity Budget (the 3rd one). For the information on the Unity Budget (the very 1st one), refer to What’s up with the 2020 Budget Business-wise
The Singapore government developed 2 sets of measures to help people and local companies survive the economic slump caused by the COVID-19 outbreak.
The state initiatives are aimed at helping companies maintain healthy cash flow, cut the costs, and preserve access to credit no matter how hard they are hit.
Below we list the initiatives that will save you thousands of dollars and help to protect your staff.
The state will co-fund your local employees’ salaries
The Jobs Support Scheme was first introduced in Budget 2020, and now it got a boost.
Under the Jobs Support Scheme (JJS), the state will reimburse up to 25% of every salary you pay to your local employees — citizens and permanent residents.
⚡️The April wage subsidy will compensate you as much as 75% of every local employee’s salary.
The monthly wage cap is now set at S$4,600. Here’s how it works:
- If your employee’s gross monthly salary is less than or up to S$4,600, you will get 25% funding of what you pay them.
- If your employee earns more than S$4,600, you will get the maximum payout — a quarter of S$4,600, or S$1,150.
The most affected industries will get more support:
- Food & Beverage — a 50% funding;
- Aviation — a 75% funding;
- Travel (including licensed hotels, gated tourist attractions, and MICE venue operators) — a 75% funding.
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The exception will be the businesses owners on payroll — their salaries won’t be co-funded regardless of the industry.
Companies are signed up for the Jobs Support Scheme automatically, so there’s no need to apply. IRAS will notify you about the payments and then transfer money in May, July, and October 2020.
IRAS will calculate your JSS payouts using the CPF contributions data — so make sure your company transfers these in time.
⚡️The state will support you in supporting your foreign workers
Here’s what you’ll get:
- a waiver of monthly foreign work levy due in April 2020;
- a foreign worker levy rebate of $750 for every Work Permit or S-Pass holder based on the previous levies paid in 2020.
Your income tax payments are postponed for 3 months
Companies get a 3-month deferment from income tax. The payments will start in July 2020.
“If you made money last year and need to pay tax this year, you will delay paying for 3 months, so you can use the cash to meet other urgent needs,” Singapore Finance Minister Heng said.
The tax payments are postponed automatically — there’s no need to apply for it.
You will pay less or no property tax in 2020
Hotels, service apartments, tourist attractions, shops, and restaurants will pay no property tax.
Businesses in other non-residential properties (e.g. offices) that are subject to property tax will pay 30% less than before.
⚡️They will let you put some contractual obligations on hold
Businesses and individuals will be able to temporarily defer some of their contractual obligations, for example:
- paying rent;
- repaying loans;
- completing work;
- etc.
The Ministry of Law will soon introduce a bill addressing this scenario. This bill will also ensure that property owners pass on the property tax rebate in full, making rent more affordable for the tenants.
All government fees and charges will be frozen for 1 year
The Ministry of Finance freezes all government fees and charges for 1 year, from 1 April 2020 to 31 March 2021.
It means that the fees and charges will not be increased for one year, from 1 April 2020 to 31 March 2021. You’ll still need to pay them during this period but at the current rates.
⚡️UPD: Frequently Asked Questions
What are some examples of Government fees and charges that will not be increased?
Generally, all fees and charges imposed by Ministries, Organs of State, and Statutory Boards will not be increased. For businesses, some examples are LTA and STB licence fees, SFA food import permits, ACRA company registration fees, NEA inspection fees, and fees for certification of government documents.
Why isn’t the Government waiving all fee collections during this period?
They simply chose a different way of supporting us — they provide cash payouts, rebates, rental waivers, etc.
The state protects your access to credit
It’s important that businesses have access to credit during these hard times. Here are the programs that were enhanced:
The Loan Insurance Scheme helps a company get short-term trade financing by insuring banks against the company going under.
- Subsidies to businesses for loan insurance premiums under the Loan Insurance Scheme increase to 80%.