New Jobs Support Scheme
This is a temporary scheme for 2020 designed to improve companies’ cashflow. All active businesses will automatically receive an 8% cash grant on the gross monthly wages of Singaporean and Singapore Permanent Resident employees on CPF payroll from October to December 2019. A monthly wage cap of $3,600 per employee applies. The grant will be disbursed by IRAS by 31 July 2020.
New SkillsFuture Enterprise Credit
Eligible employers will receive a one-off $10,000 credit to cover up to 90% of out-of-pocket expenses for supportable enterprise capability development and workforce transformation programmes. This is a reminder from the government that companies need to see beyond the current uncertainty and continue deepening their capabilities. It complements a SkillsFuture credit top-up ranging from $500 to $1,000 for working Singaporeans to acquire new skills.
Corporate Income Tax Rebate
For YA2020, companies can look forward to a 25% rebate on tax payable, capped at $15,000. This addresses the possibility of a slower year in 2020. Also announced was an automatic two-month extension of interest- free instalments for the payment of corporate income tax on estimated chargeable income, effectively helping companies with their short-term cashflow.
Enhanced Wage Credit Scheme
The existing Wage Credit Scheme, where the government co-funds eligible wage increases, has been enhanced. The gross monthly wage ceiling will be increased from $4,000 to $5,000 to encourage companies to continue sharing productivity gains with their employees through prudent wage increases.
Enhanced Enterprise Financing Scheme-SME Working Capital Loan
This existing loan scheme, which has been available to SMEs across all industries, will be enhanced for one year. With the maximum loan quantum raised from $300,000 to $600,000, and the government taking on a greater share of the risk (up 80%, instead of the previous 50-70%), it offers an avenue for companies to meet their working capital needs. The enhanced scheme runs from March 2020 to March 2021.
New Grow Digital Scheme
The SMEs Go Digital Programme now has a new Grow Digital initiative to help SMEs venture into B2B and/or B2C digital channels. In addition to grant funding, the initiative includes Free Trade Agreement consultancy services and support to help companies set up and promote overseas. This is an opportunity for companies to explore the possibility of entering new markets through e-commerce. Details will be announced by IMDA and Enterprise Singapore in the second quarter of 2020.
While the short-term outlook for Singapore companies remains unclear, business owners should take comfort in the fact that there are measures in place to help. From defraying costs and enhancing cashflow, to facilitating growth and capability-deepening opportunities, Singapore Budget 2020 offers a glimmer of hope in these uncertain times.