Singapore Government Stimulus

Singapore

Government Stimulus

June 10th Update

FORTITUDE BUDGET

Jobs Support Scheme Changes

Businesses not allowed to resume operations in Phase 1 of the reopening post circuit breaker will continue to receive 75% cash grant on the gross monthly wages of each local employee (Singapore citizen/permanent resident) on their CPF payroll. This will apply to the period for which they are not allowed to resume operations or to August 2020, whichever is earlier and is subject to the same wage cap of $4,600.
The JSS is extended to include August 2020 wages, which will be included in the October 2020 payout.
Cash grants for businesses that are allowed to resume business from 2 June 2020 will revert to the base tier of the grant, i.e. 25% of ordinary wages subject to a wage cap of $4,600, unless it belongs to the updated list of severely-affected sectors for which the base tier is updated (see next paragraph)
New sectors included in the updated list include Built Environment, Land Transport, Qualifying Retail Outlets, Arts and Entertainment, Marine and Offshore, as well as new sub-sectors of the Aviation & Aerospace and the Tourism, Hospitality, Conventions and Exhibitions sectors. Please refer to the attached PDF file for details.
The special May 2020 payout for employers who have an existing GIRO arrangement with IRAS or have registered for PayNow Corporate by 22 May 2020, will be disbursed by 28 May 2020. Other employers will receive their cheques between 3 and 5 June 2020.
The April 2020 advance, based on actual April 2020 wages (i.e. difference between April 2020 and October 2019 wages) will be adjusted in the July payout.
The May 2020 advance based on actual May 2020 wages (i.e. difference between May 2020 and November 2019 wages) will be adjusted in the October 2020 payout.
The severely affected sectors’ base-tier cash grant will be at 75% or 50% of ordinary wages, subject to a wage cap of $4,600.

Foreign Worker Levy (FWL) Waiver and Rebate

This is only applicable to business employers that are not in MTI’s permitted list to resume operations, and all businesses in the Construction, Marine Shipyard and Process sectors.
The FWL waiver and rebate for the above businesses will be extended for up to two months:
a.The waiver will be 100% in June, and 50% in July.
b.The rebate will be $750 in June, and $375 in July.

Deferment of Increase in CPF Contribution Rates for Senior Workers

The planned increase in CPF contribution rates for senior workers by will be deferred by one year, from 1 January 2021 to 1 January 2022.
The CPF Transition Offset scheme (as announced in the Unity Budget on 18 February 2020) will similarly be deferred until after the higher contribution rates take effect.

Expanding Rental Relief for SMEs

SME tenants (i.e. with not more than $100 million in annual turnover) with qualifying leases or licenses commencing before 25 March 2020, will receive a cash grant to offset their rental costs.
a.Qualifying SME tenants of qualifying commercial properties will receive a grant of 0.8 month’s of rent
b.Qualifying SME tenants of other non-residential properties (e.g. industrial and office properties) will receive a grant of 0.64 month’s of rent
The cash grant, calculated based on the Annual Values of properties for 2020 as determined by IRAS at 13 April 2020 will be disbursed automatically by IRAS to qualifying property owners. For property owners whose properties are only partially let out, or whose properties are let out to both SME and non-SME tenants under a single property tax account, an application must be made to the IRAS for the grant.

Extending Rental Relief for Government Tenants

The government will provide additional rental waivers for the following tenants:
a. Commercial tenants will get an additional two months of rental waiver, making it a total of four months’ rental waiver received.
b. Hawkers will get an additional two months of rental waiver, making it a total of five months’ rental waiver received.
c. Other non-residential tenants will get one more month of rental waiver, making it a total of two months of rental waiver.
The government will also ensure that these measures flow through to sub-tenants, many of whom are SMEs.

Financing support for promising startups

The government will catalyse and crowd in at least another $285 million in matching private investments, to support promising startups in Singapore.
This is in addition to the $300 million that was provided by the government under the Unity Budget for deep-tech startups to gain better access to capital, expertise, and industry networks under Startup SG Equity

Support for the Built Environment Sector

The government will provide support to co-share the additional costs that will be incurred by businesses which will need to meet additional requirements in order to resume their existing projects safely.

Support for E-payments

A bonus of up to $1,500 ($300 per month, over a period of five months) will be given to encourage stallholders in hawker centres, coffee shops, and industrial canteens to adopt the unified e-payment solution that was launched in June 2019.

Digital Resilience Bonus

Eligible businesses in the F&B and retail sectors can receive a payout of up to $5,000 if they adopt PayNow Corporate and e-invoicing, as well as business process or e-commerce solutions.
There will be an additional tier of $5,000 for such businesses which also incorporate advanced solutions.
The government will also set aside $250 million to help businesses digitalise in partnership with digital platform solution providers and industry champions.

Enhanced Hiring Incentive

Applicable to any hire from eligible reskilling programmes from 27 May onwards
Employers that hire a local worker aged 40 and above who had gone through an eligible reskilling programme or training programme can receive salary support of 40% for six months, capped at $12,000 in total.
Employers that hire a local worker aged below 40 who had gone through an eligible reskilling or training programme can receive salary support of 20% for six months, capped at $6,000 in total.

SGUnited Jobs and Skills Package

SGUnited Jobs
This will be scaled up and the government targets to create more than 40,000 jobs in 2020, of which about 15,000 openings will be in the public sector.
SGUnited Traineeships and Mid-Career Traineeships
The Government aims to more than double the number of traineeships available for our young locals this year, from 8,000 to 21,000.
It will also facilitate about 4,000 more traineeships for unemployed mid-career jobseekers.

1. BANK FUNDING

The Monetary Authority of Singapore (MAS) will provide up to US$60 billion of funding to banks in Singapore.

2. ENHANCED FINANCING SUPPORT

Enhancements/expansion to the following schemes
1.Temporary Bridging Loan Programme (TBPL) – to be expanded to all sectors, and increase the maximum supported loan from $1 million to $5 million.2.Enterprise Financing Scheme (EFS) – SME Working Capital Loan to alleviate SMEs’ cash flow concerns if they require support beyond the TBPL. The maximum loan quantum for this will be further enhanced, from $600,000 to $1 million.
3.EFS – Trade Loan, by increasing the maximum loan quantum from $5 million to $10 million, and increasing the Government’s risk-share from up to 70%, to 80%.
4.Loan Insurance Scheme - increase subsidies to businesses for loan insurance premiums, from 50% to 80%.
The Monetary Authority of Singapore (MAS) is also working with banks and insurers to see how best to help businesses and individuals facing cash flow challenges with their loan obligations and insurance premium payments. Details will be announced by MAS and the industry later.

3, ENHANCEMENT TO OTHER GRANTS OR FUNDING SCHEMES

Enhancements to the following schemes (most are applicable to SMEs with minimum 30% local shareholding – please refer to attached file for conditions)
1.Enterprise Development Grant
This is available to enterprises in undertaking projects in three areas: Core Capabilities, Innovation and Productivity, and Market Access.
2.Productivity Solutions Grant
This provides support to enterprises in their transformation journey through funding support for the adoption of off-the-shelf productivity solutions and equipment that have been pre-approved by the Government

3.SMEs Go Digital
Funding to help small and medium enterprises (SMEs) build digital capabilities

4. TAX REBATES

An expansionary budget will provide a universal 25% corporate tax rebate (capped at $15,000) for all companies.
Automatic deferment of income tax payments for companies for three months.
All companies with Corporate Income Tax payments due in the months of April, May and June 2020 will be granted an automatic three-month deferment of these payments. The tax payments that are deferred from April, May and June 2020 will be collected in July, August and September 2020 respectively.
Companies can expect to receive a letter from IRAS by 15 April 2020. No application is required.
Other than sector-specific property tax rebates announced in the budget on 18 February 2020, property tax rebate will now be extended to other non-residential properties, including premises used for an industrial purpose and offices. The rebate granted will be 30%.
The rates for sector-specific property tax rebates are also increased.

3. SGUnited TRAINEESHIPS PROGRAMME

Under this programme, Workforce Singapore (WSG) will co-share manpower costs with enterprises that offer traineeships targeted at local first-time job seekers this year.
i. Up to 8,000 traineeships will be supported this year, across both large and small enterprises.
ii. This will include science and technology traineeships in our R&D labs, deep-tech startups, accelerators, and incubators.

4. JOB SUPPORT / SECTOR SCHEME

Government will provide $4 billion dollars to help workers and businesses.
25% cash grant for employers on the gross monthly wages of each local (Singapore citizen/ permanent resident) employee on their CPF payroll (up from 8% that was announced earlier on 18 February 2020)
Subject to a monthly wage cap of S$4,600 (previously $3,600) per worker
Two additional tiers of support for businesses in severely affected sectors
Aviation and tourism - 75% cash grant
Food services – 50% cash grant
Does not apply to government organisations and Rep Offices
Wages paid to business owners (including both a shareholder and director of a company), will not be eligible for the payout.

5. WORKFARE SPECIAL PAYOUT

WSP will be enhanced to provide a cash payout of $3,000 for all eligible Singaporeans, which will be paid over two equal payments of $1,500 each in 2020.

6. NO INCREASES IN GOVERNMENT FEES