Singapore Budget 2017
The Singapore Budget 2017 is delivered on 20 Feb 2017, highlighting the performance and outlook of the economy, as well as measures to help companies moving forward among other things for Singaporeans as a whole. This article summarises the various schemes and policies that may be relevant to SMEs which has been publised as part of this year Singapore Budget.
1. Measures to help firms and workers
From the Singapore Budget, firms and sectors that are doing well should focus on long term and build on momentum to seize new opportunities while specific support measures are introduced for sectors facing cyclical weaknesses
Foreign Work Levy : No changes across industries, except for construction. Levy rates for Basic tier R2 workers raised from current $650 to $700
Infrastructure Projects: Bring forward $700 million worth of public sector infrastructure projects for FY2017 and FY2018
Bridging Loan for Marine and Offshore Engineering
2. Enhanced “Adapt and Grow” Initiative
Career Support Programme: Enhanced wage support for employers to hire mature and retrenched or long-term unemployed Singapore Citizen PMETs into mid-level PMET jobs
Professional Conversion Programme: Enhanced programme to help PMET job seekers re-skill to take on new careers through training subsidies and salary support
Work Trial Programme: Additional retention incentive and wage support for those unemployed for more than 12 months to encourage hiring of these individuals
“Attach and Train”: New initiative for sectors that have good growth prospect but not ready to hire yet. Industry partners can send participants for training and work attachments to increase their chances of finding a job in the sector later on. This facilitates more career conversions
3. New Measures and Continuation Support Businesses from Singapore Budget 2017
Corporate Income Tax (CIT) Rebate
- Raised the cap of tax payable from $20,000 to $25,000 for YA2017, with the rebate remaining at 50% of tax payable
- Decreased the cap to $10,000 for YA2018, with the rebate remaining at 20% of tax payable
Additional Special Employment Credit
- Raised re-employment age from 65 to 67 years wef 01 Jul 2017
- Extension of scheme till end of 2019
- Employers will receive offsets of up to 3% for workers who earned under $4000 per month, and who are not covered by new re-employment age of 67 years old. Taken together with Special Employment Credit, employer will receive support of up to 11% for the wages of their eligible older workers
Wage Credit Scheme
Continue to help firms cope with rising wages
Special Employment Credit
Provide employers to support for wages of older workers
SME Working Capital Loan
Co-shares 50% of default risk for loans of up to $300,000 per SME by the Government
4. Measures to build our capacity for the future economy
The following measures proposed by Singapore Budget are aimed to develop adaptability and resilience as part of this year Singapore Budget:
i. Help enterprises and people understand global partners and customers better and deeply
ii. Make the most of our strengths as a nimble, well-educated, tech-savvy society
iii. Build a strong innovation and enterprise engine
iv. Building capabilities of enterprises and capabilities of people
v. Bringing all parts together in partnership
5. Digitalisation
Strengthen enterprises, especially SMEs to help them adopt digital solutions
SMEs Go Digital Programme
Singapore Budget this year proposed a collaboration with IMDA, SPRING and sector lead agencies
1.Step-by-step advice on technologies to use at each stage of their growth through sectoral Industry Digital Plans, starting with sectors where digital technology can significantly improve productivity, such as retail, food services, logistics etc.
2. In-person help at SME Centres and a new SME Technology Hub. SMEs can approach business advisors at SME Centres for advice on off-the-shelf technology solutions that are pre-approved for funding support, or connect to Info-communications and Technology (ICT) vendors and consultants. The more digitally advanced firms can get specialist advice from the SME Technology Hub
3. Receive advice and funding support for SMEs that are ready to pilot emerging ICT solutions
6. Innovation
Singapore Budget proposed to support firms in their broader efforts to tap on innovation and technology by helping them tap on these resources.
Intellectual Property Intermediary
From the Singapore Budget, companies seeking access to intellectual properties (IP) can be matched to the IP that meet their meets. A*STAR also partners with SMEs through the Headstart Programme that allows SMEs which co-develop IP with A*STAR to enjoy royalty-free and exclusive licences for 36 months in the first instance
Tech Access Initiative
Support companies in the use of costly specialised and advance machine tools for prototyping and testing by providing access to equipment, user training and advice
7. Scaling Up Globally
Strengthen enterprises by helping them to scale up globally.
International Partnership Fund
$600 million Government capital that will co-invest with Singapore-based firm to help them scale-up and internationalise
Internationalisation Finance Scheme (Clifford Capital)
Aims to help more companies build capabilities to go international, go digital and to innovate
Catalyse private cross-border project financing to smaller Singapore-based infrastructure developers, by co-sharing the default risk of lower quantum non-recourse loans
Accelerate financing for projects undertaken by larger firms in higher-risk developing markets, by providing a share of the needed sovereign risk insurance coverage
8. Building Capabilities to Operate Overseas
Global Innovation Alliance
Consist of three programmes for Singaporeans to gain overseas experience, build networks and collaborate with counterparts in other innovative cities from the Singapore Budget
1. Innovators Academy
Enable tertiary students to build connections and capabilities overseas
2. Innovation Launchpads
Create opportunities for entrepreneurs and business owners to connect with mentors, investors and service providers in selected overseas market.
3. Welcome Centres
Allowing innovative foreign companies to link up with Singapore partners to co-innovate, test new products in Singapore and expand in the region.
Skills Future Leadership Development Initiative
Support companies to groom Singaporean leaders by expanding leadership development programmes.
9. Acquiring and Using Deep Skills in Jobs
Increase accessibility of Training
The Singapore Budget mentions that subsidies will be offered and more short, modular courses by expanding e-learning at universities, polytechnics and ITE
Strengthening On-the-Job Skills Utilisation
Making National Jobs Bank more useful for jobseekers and employers and work with private placement firms to deliver better job matching services for professionals
Funding support from SkillsFuture Singapore for companies who develop training programmes for their workers and the industry
10. Sustaining a Quality Environment for the Future
Carbon Tax
Intention to implement carbon tax on emission of greenhouse gases from 2019, at a tax rate of between $10 and $20 per tonne of greenhouse gases emission.
Restructuring Diesel Tax
Introduction of a volume-based duty at $0.10 per litre on automotive diesel, industrial diesel and the diesel component in biodiesel while concurrently reduce the annual Special Tax on diesel cars and taxis by $100 and $850 respectively
100% road tax rebate for one year, and partial road tax rebate for another two years for commercial diesel vehicles to help businesses adjust
Additional cash rebates for diesel buses ferrying school children
Vehicular Emissions Scheme
Replace the old Carbon Emissions-based Vehicle Scheme, CEVS with the new Vehicular Emissions Scheme which consider four other pollutants on top of carbon dioxide, that will commence in 1st Jan 2018 for two years
Early Turnover Scheme
Extend the scheme for vehicle owners who turn over their existing Euro II and III commercial diesel vehicles for Euro VI vehicles until 31st Jul 2019, and further enhance the Certificate of Entitlement (COE) bonus period for Light Goods Vehicles
Water Price Changes
Increase water prices by 30% in two phases, starting from 1st Jul 2017
Restructuring Sanitary Appliance Fee and Waterborne Fee into a single volume-based Fee
For 75% of the companies, increase in fees will be less than 25% per month once the increase is fully phased in on 1st Jul 2018
Water Conservation Tax
Imposed on NEWater at a rate of 10% of the NEWater tariff starting from 1st Jul 2017 to encourage conversation of NEWater among industry users
Despite various measures outlined in Singapore Budget 2017, SMEs often still face a high cost of financing and lack of working capital in the short term. InvoiceInterchange stands ready to help SMEs tackle the challenges by providing a low cost of financing through invoice trading. From the Singapore budget, these capital locked in the supply chain can be utilized to develop and integrate technology into the business, mitigate operational cost and even finance the cost required for venturing into new markets. Free up the locked cash by invoice trading to obtain payment much earlier now!
