Singapore Budget 2020: A One-Page Executive Summary
There has been a lot of buzz around Singapore Budget 2020, especially in a time where many businesses are reeling from the economic impacts of COVID-19. Here’s what’s on the table!
Short term relief
- Corporate Income Tax Rebate of 25% of tax payable for YA2020.
- Cap of $15,000 for each company applies.
- Rental Waivers for Commercial Tenants in Government-owned / managed facilities
- Eligible tenants/lessees may include providers of commercial accommodation, retail, F&B, recreation, entertainment, healthcare, and more.
- No GST increase till beyond 2021. But will still be raised to 9% by 2025.
Jobs: Retention and Progression
- Employers will receive an 8% cash grant on the gross monthly wages of each Singaporean and PR employee for the months of October to December 2019
- A monthly wage cap of $3,600 per employee applies.
- No action needed. The grant is computed based on CPF contribution data.
- Employers can expect the JSS payment from IRAS by 31 July 2020.
Preparing for better days: Up-skilling and Refurbishments
- One-off SkillsFuture top-up
- Singaporeans aged ≥ 25 to get a top-up** of $500 from 1st Oct 2020.
- Singaporeans aged 40-60 will receive an additional $500 top-up**
- **Top-ups will expire in 5 years.
- New SkillsFuture Enterprise Credit scheme to defray up to 90% of out-of-pocket costs of business transformation, job redesign, and skills training.
- A cap of $10,000 per company applies.
- More than 35,000 firms, mostly SMEs, are expected to benefit.
- Enhanced Enterprise Financing Scheme – SME Working Capital Loan (EFS-WCL)
- Maximum loan quantum increased from $300,000 to $600,000.
- The government’s risk-share enhanced to up to 80%
- Applicable for SMEs borrowing from Participating Financial Institutions.
- Starts in March 2020, and is available for one year till March 2021.
Enhanced Corporate Tax Treatments
- Companies paying their Corporate Income Tax via GIRO can automatically enjoy an additional two months of interest-free installments when they file their Estimated Chargeable Income (ECI) within 3 months from their Financial Year End. This applies to companies that:
- File their ECI from 19 February 2020 to 31 December 2020;
- Filed their ECI before 19 February 2020, and have ongoing installment payments to be made in March 2020.
- Up to $100,000 of the unabsorbed capital allowances and trade losses for YA2020 to be carried back up to three immediate preceding YAs, instead of one preceding YA;
- Option to accelerate the write-off of acquisition costs for plant and machinery in FY2020 (i.e. incurred for YA2021) over two years
- Option to accelerate the deduction of costs incurred on renovation and refurbishment in FY2020 (i.e. incurred for YA2021) in one year.
- On the whole, the measures are meant to encourage up-skilling and refurbishment in most industry sectors.
- Sustainability & Climate Change – Singapore to phase out internal combustion engine vehicles by 2040
- Added support for Deep-tech startups
- Additional S$300 million under the Startup SG Equity co-investment scheme
- Specifically: Pharmbio and Medtech, advanced manufacturing, agri-food tech
While the measures and packages presented are not as generous as businesses could’ve hoped, the government has certainly stepped up and the support will go a long way in helping businesses survive the harsh market conditions.
But if you’d like more candid recommendations from our accounting team, why not join us for a free webinar + Q&A session?
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