As the COVID-19 pandemic enters its second wave, Minister of Finance Heng Swee Kiat announced a S$48 Billion supplementary “Resilience Budget” to support Singaporeans and Singapore businesses during this unprecedented global crisis.
This follows his Stabilisation and Support Package announced in Feb 2020. Significantly, this is only the second time in our nation’s existence that we are dipping into our reserves – the first was during the 2009 financial crisis.
Here are some of the Resilience Budget highlights:
Jobs Support Scheme
Employers will receive a 25% cash grant on the gross monthly wages of each local employee (applicable to Singapore Citizens and Permanent Residents only) for February to July 2020, subject to a monthly wage cap of S$4,600 per employee. This is an increase on the previously announced 8% cash grant for wages paid in October 2019 to December 2019 (the “First Tranche”), which was subject to a lower monthly wage cap of $3,600 per employee. The pay-out for the First Tranche will now be increased to 25%, with the higher S$4,600 wage cap.
Sectors most affected by the coronavirus will receive up to 75% of the first S$4,600 of gross monthly wages per local employee.
This will be paid automatically and there is no need for businesses to register or apply. Click here for more information.
Enhancement to Wage Credit Scheme
The government will co-fund wage increases given to Singapore Citizen employees who meet the criteria, subject to the qualifying gross monthly wage ceiling of S$5,000. The respective co-funding ratios are 20% for 2019 and 15% for 2020. The scheduled payment date will be brought forward from the end of September to end of June 2020.
This will also be paid automatically, with no need for businesses to register or apply. Click here for more information.
Enhancements to Enterprise Financing Scheme
Under this scheme, there are 4 subcategories: (i) Working Capital Loan, (ii) Trade Loan, (iii) Loan Insurance Scheme and (iv) Temporary Bridging Loan Programme. We will focus on the Working Capital Loan.
The Working Capital Loan is intended to help small and medium enterprises (SMEs) access to financing for operational cashflow needs. The existing SME Working Capital Loan scheme will be enhanced – the maximum loan amount will now be S$1 million (up from S$600,000), with a maximum repayment of period of 5 years, and the government will risk share 80% of the loan amount. Click here for more information.
Deferment of Income Tax payments
All corporate tax due in April 2020 will be deferred to June 2020.
Enhanced property tax rebates
There will be a 30% property tax rebate for 2020 for non-residential property owners. Certain qualifying commercial properties will receive a 100% tax rebate.
Enhanced rental waivers for government-owned properties
Tenants in commercial and other non-residential government-owned properties will benefit from up to two months’ waived rent.
All government fees frozen
All government fees and charges will be frozen for a year, from 1 April 2020 to 31 March 2021.
The government will co-fund wage costs for companies offering traineeships to local first-time job seekers. This will be offered to SMEs, as well as large and multi-national corporations. The Ministry of Manpower will provide more details in due course.
Increased support for capability development
There are also various schemes announced to help local businesses expand their capabilities, such as the Productivity Solutions Grant and Enterprise Development Grant. The maximum support levels for these have increased to 80% and 90% respectively, until 31 December 2020.
The Productivity Solutions Grant is designed to support local companies wanting to adopt IT solutions and equipment to enhance business processes (e.g. remote working capabilities using online document management), while the Enterprise Development Grant is intended to help local companies increase core capabilities, innovation and productivity, and to defray the cost of overseas expansion. Click here to learn more about the Productivity Solutions Grant, and here for the Enterprise Development Grant.
There is also sector-specific support for the hotel, retail, food services, tourism, air transport industries as well as the arts. We will release sector-specific guidance in due course. If you would like our advice on how the Resilience Package can benefit you, please get in touch.