Top 10 Budget 2020 for Singapore – Information You Should know
Singapore budget 2020 was announced on February 18, 2020, with Finance Minister Mr Heng Swee Keat stating some exciting incentives. In this blog, we look at some of the highlights of the SG budget. Here are the top 10 budget 2020 information for Singapore:
1. Fights Against the Corona Virus are Accelerating
The budget speech 2020 took place in the parliament amidst the growing uncertainties of the Covid-19 (corona) virus in the region. With the outbreak being more of a threat every passing day, the Singapore government didn’t take any time to announce measures to tackle it very seriously.
At least $800 million will be used on the ‘frontlines’ to help agencies and medical/ research centres respond against Covid-19. This budget will be distributed among the Ministry of Health and other related ministries.
2. Government Will Be taking Actions Against the Economic Situation with Support Package for Households
More than $6 billion have been set aside to tackle the economic and other deficits caused by the outbreak of coronavirus.
Care and Support Package for Households
The care and support package is one of the key takeaways from the budget 2020 speech. The Singapore government will use $4 billion to keep workers in their job. This will also help companies with cash flow and other related support.
Moreover, a special Care and Support Package of $1.6 billion has been allocated for every Singapore household. Every Singaporean adult more than 21 years of age will get a one-off payment ranging from $100 to $300. The amount depends on how much income they make.
People earning up to $28,000 in the 2019 year of assessment will get $300. Those whose income was from $28,001 to $100,000 will get $200, and those who had an assessable income of more than $100,000 will get $100. Moreover, those who own more than one property will only get $100.
Parents with children below 20 years old will get an additional $100.
3. A new Scheme for Empowering the Local Workforce
Singapore’s top 10 budget 2020 information consists of the government introducing yet another scheme to provide wage support for enterprises to empower and retain the local workforce. The job support schemes will provide employers an 8% cash grant for every employee’s (Singapore citizen and Permanent Residents) monthly salary for three months. The cap is set at $3,600.
The payout for this program is $1.3 billion, and the government plans to provide all the grants by July 31, 2020.
4. The Existing Work Credit Scheme Will be Enhanced
The 2020 budget aims to enhance the existing Work Credit Scheme. From now on, the program will co-fund 20% of wage increments in 2019 and 15% of wage increments in 2020. It applies only to Singaporean employees earning a monthly income (gross) of up to $5,000.
5. The GST Won’t Increase
Many expected an increased GST in the budget 2020 speech, but that didn’t change for now. The GST will remain 7% despite the projections- making this fact another one of Singapore’s top 10 budget 2020 information.
Rather, corporates will get an income tax rebate in the 2020 financial year at a rate of 25%. The Cap is $15,000 per company.
6. Existing Tax Benefits Will Be Available for a Longer Time
Singapore budget 2020 announcement saw the enhancement of existing incentives. The Double Tax deduction for International Scheme will remain until December 31, 2025. Furthermore, the scheme will soon cover third-party consultancy and other costs in overseas business missions. The Mergers and Acquisition scheme will also now be available until 2025.
Other schemes to be extended include the Insurance Business Development umbrella scheme, IBD-Captive Insurance till 2025, and Maritime Sector Incentive till December 2026. Additionally, the withholding tax exemption will cover members of approved clearing houses and related products.
7. Some Business Sectors will get Special Benefits
With China being Singapore’s largest trading partner and the Coronavirus outbreak, certain sectors have been affected more than the others. The government aims to reimburse by reskilling 330,000 local workforces in those fields, which includes tourism, food services, aviation, and retail sectors.
There are other supports as well, including:
- Meetings, incentives, Exhibitions, and Convention venues will get a property tax rebate of 30 percent in 2020
- Ferries and international cruises will get a property tax rebate of 15 percent
- Integrated resorts will get a 10 percent tax rebate
- Enterprises in the tourism sector will get loans up to $1 million, with the interest rate capped at 5 percent. The government will itself take an 80 percent risk of the loan
- The Changi International airport will get 15 percent property tax refunds, and other rebates will be given on aircraft landing, parking charges. Also, shops and cargo companies at the airport will get rental rebates
- Shareholders in the National Environment Agency Managed markets will get a rental waiver for an entire month. Also, selected commercial properties will get a 15 percent tax property rebate
- Finally, the government will provide a $55 million package to support taxi and private-hire drivers
8. Government has Brought New Plans and Improved its Incentives in the Education Sector
Education is another topic discussed in Singapore’s top 10 budget 2020 information.
This year, the government has brought a 70-70 plan for students of institutes of higher learning. The ruling authorities want at least 70% of students to get international exposure, and 70% of that in the Southeast Asian Nations (ASEAN), China, and India.
Additionally, the government will spend $2 billion in the early childhood sector for quality preschool education. Also, they have laid out plans for increasing the government-supported preschool by 80% until 2025.
Talking about the schemes, the Ministry of Education’s Financial Assistance Scheme (FAS) has now increased the annual bursary quantum for pre-university students to $1,000 from the previous year’s $900. The cash bursary quantum of ITE students from lower and middle-income families can increase up to $200 a year.
9. New Schemes for Middle-Aged Workforce and the Elderly
Singaporeans aged 25 to 40 will get one, and those aged 40 to 60 will get two $500 Skillsfuture credit top-up to encourage them to learn new skills. Moreover, a new SkillsFuture Mid-Career Support Package will be introduced to increase the number of jobholders in the age range.
From the above programs, employers who hire individuals aged 40 and above will get a 20 percent salary support for six months until $6,000. Employers from 39,000 firms will receive $10,000 under the new SkillsFuture Enterprise credit, and Productivity Solutions Grant will now include job redesign consultancy services.
On the other hand, the CPF has introduced a Matched Retirement Savings Scheme from 2021 and 2025. In this scheme, the government will match every dollar of cash made by lower and middle-income Singaporeans between 55 to 70 years of age who haven’t been able to deposit the basic retirement fund in their CPF account. The annual cap is $600.
The quarterly payouts for the Silver Support Scheme are now 20 percent.
10. The 2020 Budget Speech Addressed Climate Change
One of the main highlights and making into our list of Singapore’s Top 10 Budget 2020 highlights is the battle against climate change. This year, the Singapore government has decided to approach this issue mostly by the promotion of Electric Vehicles (EVs).
Vehicles running on gas and petrol are one of the biggest reasons for Climate Change and Global Warming. Thus, to minimise their use and promote the EVs, carbon tax was introduced last year. This year too, the tax will be given continuity, with incentives coming to those who are using Electronic transportation.
From 2021, Electric cars and taxis will get a refund of a maximum of 45 percent on the Additional Registration Fee, capped at $20,000. This is a part of the Commercial Vehicle Emissions Scheme (CVES) for light goods vehicles, and it will be available initially from 2021 to 2024. Also, the road taxes for Electronic vehicle owners are set to decrease in the coming days.
The government also aims to expand the number of charging points to 28,000 from the current 1,600 by 2030. Furthermore, government vehicles and public transports will eventually be electronic.
The budget 2020 speech also consisted of Mr. Heng introducing a Coastal and Flood Protection Fund of $5 billion.
So, these are the highlights of the Singapore budget 2020. You can contact 3E Accounting if you have inquiries or require clarification regarding this article.