Updated: Apr 28, 2020
This article covers the support package from the Resilient Budget and the Solidarity Budget. Singapore government developed 2 sets of measures to help local enterprises and people to survive from the economic storm caused by the COVID-19 outbreak. These initiative are aimed to help businesses maintain healthy cash flow, cut the costs and preserve access to credit. In this article we will list the initiatives that will save your business thousands of dollar and also help to protect your staff.
Income Tax payment are deferred for 3 months
Companies get 3-month postponed for income tax payment. The payment will start in July 2020. The tax payment is postponed automatically so there's no need to apply for ti.
Mr Heng Swee Keat, Singapore Finance Minister said "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”
Business will pay less or no property tax in year 2020
Tourist attraction, hotels, services apartments, shop and restaurant - pay no property tax
Business in other non-residential properties (e.g. office) that are subject to property tax - pay 30% less on property tax
All the government fees and charges will be frozen for one year
From 1 April 2020 to 31 March 2021, all the government fees and charges will not be increase. You will need to pay'em during this period but at the current rate. The government fees and charges include all the fees and charges impose by the Ministries, Organ of State and Statutory Boards. Beside, fees and charges for business like LTA and STB license fees, SFA food import permits, ACRA company registration fees, NEA inspection fees and fees for certification of government document will also be frozen.
Government will let Business put some contractual obligations on hold
Business will be able to temporarily postpone some contractual obligations like rent, repaying loans, completing work and etc.
The Minister of Law will soon introduce a bill addressing on this. This bill will ensure the property owners pass on property tax in full, making rent more affordable for the tenants.
The Singapore Government will co-fund your local employees' salaries
The Job Support Scheme was first introduced in budget 2020. To encourage firms to retain local workers (Singapore Citizen and Singapore Permanent Resident) during this period os uncertainty. Government will co-fund the first $4,600 of monthly wages for every local employee in employment for 9 months.
The April and May 2020 wage subsidy will compensate businesses as much as 75% of every employee's salary.
According to Special Job Support Scheme announced on 21 April 2020:
Shareholder-director with Assessable Income ≤ 100,000 now eligible
75% wage support for all sectors in May 2020
Special JSS payout to reach employers by end-May 2020
The monthly wage support cap is now set at S$4,600.
If employee's gross monthly salary is less than or up to S$4,600, employer will get 25% funding on the payout amount.
If employee's earns more than S$4,600, employer will get the maximum payout of a quarter of S$4,600 (S$1,150)
For the remaining qualifying months, the most affected industries will get more support from the government:
Aviation & Tourism - 75% wage support
Food Services - 50% wage support
All other sectors - 25% wage support
Companies are signed up for the Job Support Scheme automatically. IRAS will notify the employer about the payment.
JSS payout will be made on these following months:
April - 1st Payout
May - Special JSS to cover May
July - 2nd Payout
October - 3rd Payout
IRAS will calculate JSS payout using the CPF contribution data. These mean that employers need to make sure the CPF transfer is in time.
The Government will support the employers in supporting the foreign workers
Employer will get Foreign Worker Levy (FWL) support from the government.
Waiver of monthly FWL due in April and May 2020
Foreign Worker Levy of 750/months in April and May 2020 for each S-Pass or Work Permit holder based on the previous levy paid.
Singapore Government protect business access to credit
During this crisis, it is very important that businesses have access to credit. Enterprise Singapore can secure short-term trade financing loans via the Loan Insurance Scheme (LIS) by Participating Financial Institute (PFI). The subsidies increase to 80% to businesses for loan insurance premiums under the Loans Insurance Scheme.
Enterprise Financing Scheme (EFS)
Borrow up to S$10 milliontEFS - SME Working Capital Loan
Borrow up to S$1 million
Enterprises can borrow up to S$5 million with a yearly interest rate up to 5% under the Temporary Bridging Loan Programme (TBLP). The government will provides 80% risk-share on these loans. This programme is now available for enterprises from all industries.
If businesses apply for the loan under the TBLP and EFS before 31 March 2021, the government's risk shares will be 90%
Monetary Authority Singapore (MAS) and Banks will help business with credit obligation
MAS and Banks in Singapore team up to help enterprises to face through this pandemic.
A temporary suspension on principal payments on secured term loans
SMEs may postpone principal payments on their secured term loans up to 31 December 2020. SMEs will be paying the interest and not actually giving back the money they borrowed.
Besides, SMEs will also be able to extend the tenure of their loans by up to their deferment period. The bank and finance companies will make decision based on the reliability of the SMEs. SMEs need to maintain a healthy relationship with banks and finance companies by paying the interest no more then 90 days past due.
SMEs are also encouraged to turn to banks and negotiate to alter their loan repayment schedule to other types of loans.
Interest rate is lower for SMEs
This is still under development. The government will fund the loans granted under Enterprise Singapore's Working Capital Loan scheme and Temporary Bridging Loan Programme.
Finance companies and banks will need to apply for these funds, financial institute need to make the conditions more favorable for SMEs. This may drive down the interest rate.
Assistance in Insurance Premium Payment
SMEs can now apply for installment payment plans for general policy that protect business and property risks. The coverage will be in place for the paid-up period.
Stay Home, Stay Healthy and Go Digital!
Compare with the financial crisis in 2009, The Singapore Government is a lot more generous this time to support the nation by pouring more money. However, tough times are here due to the pandemic and the global economics downturn.
It is time for businesses to transform, digitalise businesses with online services is an opportunity and also the most comfortable way during the global lock-down. Government is now actively supporting more traditional business to catch up and evolve. So let us stay active and connected with our government and support each others.