The 2021 Singapore Budget was announced on Tuesday, 16th Feb 2021 by Singapore’s Deputy Prime Minister and Minister for Finance, Mr. Heng Swee Keat. This year’s budget – ‘Emerging Stronger Together’ primarily focuses on the economic recovery from the COVID-19 pandemic with a commitment of nearly $100 billion in FY2020. How will your business benefit from the 2021 budget?
Supporting Your Business Wages
Extension to Job Support Scheme (JSS)
JSS will continue to provide wage support for employers to retain local employees (Singapore Citizens and Permanent Residents). Summary of changes are:
- JSS will be extended up to six months for Tier 1 (e.g. Aviation, Aerospace, and Tourism) and Tier 2 (e.g. Food Services, Retail, Marine & Offshore, and Arts and Entertainment).
- Covers the period from April 2021 to September 2021
- Tier 3A sectors currently receive 10% JSS support for wages paid from September 2020 to March 2021. JSS support will cease thereafter.
Extension to Wage Credit Scheme (WCS)
WCS was introduced back in Budget 2013, where the government co-funds salary increases.
As part of Budget 2020, WCS will be extended to 2021 with the government co-funding ratio remaining at 15% and the qualifying gross wage ceiling at $5,000.
See eligibility criteria here.
Extension to Job Growth Incentive (JGI)
JGI was first introduced back in 2020. It aims to help businesses recruit more local employees. As part of the 2021 Singapore budget, an additional 5.4 billion dollars will be allocated to Job Growth Incentive (JGI), extending the incentive for another seven months
Eligible companies that hire between March 2021 and September 2021 will receive wage support:
- For non-mature locals, up to 12 months based on 25% of the first $5,000 of gross monthly income, from the month of hire.
- For mature workers (aged 40 & above), persons with disabilities and ex-offenders, up to 18 months (12 months previously) based on 50% of the first $6,000 ($5,000 previously) of gross monthly income. Eligible companies that had hired such locals between September 2020 and February 2021 will enjoy the enhanced support from March 2021.
Goods and Services Tax (GST)
GST rate increase
The planned increase of GST rate from 7% to 9% is now postponed and will not be raised in 2021 to help finance the current spending needs. The increase on the GST rate will now be made between 2022 to 2025.
From 1 January 2023, GST will be extended to
- Low-value goods which are imported via air or post.
- B2C imported non-digital services (such as live interaction with overseas providers of educational learning, fitness training, counselling, and telemedicine)
This will help ensure a level playing field for local businesses and overseas suppliers.
Updated GST Zero-Rating for media sales
Zero-rating GST for media sales will be applied based on:
- If the customer of the service belongs outside Singapore and the direct beneficiary either belongs outside Singapore or is GST-registered in Singapore, the media sales will be zero-rated; and
- If the customer belongs in Singapore, the media sales will be standard rated.
This change will take effect for the supply of media sales on or after 1 January 2022.
Continued Financial Support for SMEs
2021 Singapore Budget will continue to financial support local businesses to help recover from the recession caused by the pandemic.
Extend and Enhance the Enterprise Financing Scheme – Venture Debt programme
The government will be increasing the loan cap for the Venture Debt programme for high growth companies including start-ups from S$5 million to S$8 million. The government shares up to 70 percent of the risk on eligible loans with participating financial institutions.
Extend Enterprise Schemes Enhancements
The Government will extend its enhanced support of up to 80 per cent for existing enterprise schemes to end-March 2022. These include the Scale-up SG programme, Productivity Solutions Grant, Market Readiness Assistance Grant and Enterprise Development Grant.
Market Readiness Assistance Grant (MRA)
The purpose of MRA grant is to help your business expand overseas. Eligible businesses will receive the following support:
- Up to 70% of eligible costs, capped at S$100,000 per company per new market* from 1 April 2020 to 31 March 2023 that covers:
- Overseas market promotion (capped at S$20,000)
- Overseas business development (capped at S$50,000)
- Overseas market set-up (capped at S$30,000)
- Each application is limited to one activity in a single overseas market (e.g. market entry, or participation in a trade fair)
Enterprise Development Grant (EDG)
The purpose of EDG is to help support SMEs to grow and transform through innovation or overseas expansion. The grant funds qualifying project costs namely third party consultancy fees, software and equipment, and internal manpower cost.
2021 Singapore Budget will help Singapore businesses recover from the recession caused by the pandemic.