The Singapore Budget 2020 was delivered by the Deputy Prime Minister and Finance Minister, Mr Heng Swee Keat, on 18 February 2020.
This article highlights some of the key initiatives and support from the Government to businesses, Startups and Small and Medium Enterprises.
- Jobs Support Scheme: Employers will receive 8% cash grant on gross monthly wages of each local employee (SG citizen and PR) for Oct to Dec 2019, subject to monthly wage cap of $3,600 per employee.
- Enhancement of Wage Credit Scheme: Monthly wage ceiling is increased to $5,000 from $4,000, and funding levels for 2019 and 2020 qualifying wage is increased to 20% and 15% respectively.
Corporate Income Tax (CIT) changes
- CIT Rebate: The CIT rebate for Year of Assessment (YA) 2020 will be at 25% of CIT payable, capped at $15,000.
- Interest-free instalments on CIT: Companies that file their Estimated Chargeable Income (ECI) within 3 months from the companies’ financial year end would automatically enjoy additional 2 months of interest-free instalments.
- Carry back unabsorbed capital allowances (CA) and trade losses for YA 2020: Up to $100,000 unabsorbed CA and trade losses can be carried back up to 3 immediate preceding YAs.
- Enhancement to capital allowances: Option to accelerate write-off (2 years instead of 3 years) for plant & machinery acquired in YA 2021, 75% of cost in YA 2021 and 25% of cost in YA 2022.
- Enhancement to renovation and refurbishment (R&R) expenses: Option to accelerate deductions (1 year instead of 3 years) of qualifying renovation and refurbishment expenses. The cap of $300,000 for every relevant period of 3 consecutive YAs will still apply.
Deferment of Goods and Services Tax raise
- The GST rate will remain at 7% in 2021.
Support for Startups and Small & Medium Enterprises (SMEs)
- Enhancement to SME Working Capital Loan: The maximum loan quantum is raised from $300,000 to $600,000 for March 2020 to March 2021.
- Enhancement to Startup SG Equity: Additional $300 million will be set aside to catalyse private investment into Singapore-based deep-tech startups in key emerging sectors. These sectors include pharmbio and medtech, advanced manufacturing and agri-food tech.
- SMEs GO Digital: Will be expanded to cover more sectors. The IMDA and Enterprise Singapore will co-fund 70% of multichannel e-commerce platform solution packages for eligible SMEs.
- Enhancement to Market Readiness Assistance: Grant cap for supportable activities such as setting up overseas business, identifying business partners, promoting products and services would be increased from $20,000 per year to $100,000 per new market per company over the enhancement period of FY 20 – 22. Further, the 70% support would be extended for another 3 years, till 31 March 2023.