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The following is the Singapore Budget 2020 Summary announced by Minister for Finance, Mr. Heng Swee Keat in his Budget Statement for the Financial Year 2020 which was delivered in Parliament on Tuesday, 18 February 2020.
Corporate Income Tax (“CIT”) Rebate
CIT Rebate of 25% of tax payable, capped at $15,000, will be granted for Year of Assessment (“YA”) 2020.
Automatic extension of interest-free instalments of 2 months for payment of CIT on Estimated Chargeable Income (“ECI”) filed within 3 months from the companies’ financial year-end
Automatic extension of instalment plan by 2 more months will apply to:
- Companies that file their ECI from 19 February 2020 to 31 December 2020; and
- Companies that file their ECI before 19 February 2020, and have ongoing instalment payments to be made in March 2020.
Enhancement of carry-back relief scheme for YA2020 unabsorbed capital allowances (“CA”) and trade losses for a YA (collectively referred to as “qualifying deductions”)
Under the enhanced scheme, qualifying deductions for YA2020 may be carried back up to 3 immediate preceding YAs, capped at $100,000 of qualifying deductions and subject to conditions.
Option for the accelerated write-off of the cost of acquiring plant and machinery (“P&M”)
For P&M acquired in YA2021, there is the option for 2 years accelerated capital allowances – 75% of the cost incurred to be written off in the first year (i.e. YA2021) and 25% of the cost incurred to be written off in the second year (i.e. YA2022). No deferment of capital allowances claim is allowed under this option.
Option to accelerate the deduction of expenses incurred on renovation and refurbishment (“R&R”)
The accelerated deduction will be available for expenditure incurred in the basis period for YA2021 on R&R. Businesses can opt to claim deduction over one year instead of three years. However, it remains subject to the same overall cap as before of $300,000 for every relevant period of 3 consecutive YAs.
Extension and enhancement of the Double Tax Deduction for Internationalisation (“DTDi”) scheme
DTDi scheme will be extended till 31 December 2025 and enhanced to cover third-party consultancy costs relating to new overseas business development to identify suitable talent and build up the business network and new categories of expenses incurred for overseas business missions.
Mergers & Acquisitions (“M&A”) scheme
Extended to cover qualifying acquisitions made on or before 31 December 2025. However, stamp duty relief will lapse for instruments executed on or after 1 April 2020.
Tax incentive scheme for insurance businesses
Extended till 31 December 2025. Concessionary tax rate remains at 10%.
Maritime Sector Incentive (“MSI”) and Finance and Treasury Centre (“FTC”) schemes
Both schemes are extended till 31 December 2026.
Tax incentives for venture capital funds and venture capital fund management companies
Extended till 31 December 2025.
Land Intensification Allowance (“LIA”) scheme
Extended till 31 December 2025.
Further tax deduction scheme for R&D expenditure under Section 14E of the ITA (“Section 14E incentive”)
Section 14E incentive will lapse after 31 March 2020.
Extend the withholding tax exemption for non-resident mediators and arbitrators
Withholding tax exemption will be extended till 31 March 2022.
Lapsing of concessionary withholding tax rate for non-resident public entertainers
Concessionary withholding tax rate of 10% will lapse after 31 March 2022.
Lapsing of Angel Investors Tax Deduction scheme
The scheme will lapse after 31 March 2020.
Goods and Services Tax
GST rate remains at 7% and the GST hike to 9% will not take effect in 2021, but will still be raised by 2025. The government will assess the appropriate time for the announcement.
Property Tax Rebate
Property tax rebates will be granted to licensed hotels, serviced apartments, prescribed Meetings, Incentive, Conferences and Events (“MICE”) venues, and other qualifying commercial properties.
Jobs Support Scheme
Employers will receive an 8% cash grant on the gross monthly wages of each local employee (applicable to Singapore Citizens and Permanent Residents only) for the months of October 2019 to December 2019, subject to a monthly wage cap of $3,600 per employee.
Enhancement to Wage Credit Scheme
The Wage Credit Scheme (WCS) will be enhanced as follows:
|Scheme||Existing WCS||Enhanced WCS|
|as announced in Budget 2018||as announced in Budget 2020|
|Qualifying years||2018, 2019, 2020||2019, 2020|
|Level of co-funding||20% of qualifying wage increases in 2018||20% of qualifying wage increases in 2019|
|15% of qualifying wage increases in 2019||15% of qualifying wage increases in 2020|
|10% of qualifying wage increases in 2020|
|Gross monthly wage ceiling||$4,000||$5,000|
|Qualifying wage increases||Increases in gross monthly wage of at least $50 given to Singaporean employees in the qualifying year, up to a gross monthly wage level of $4,000, will be co-funded.||Increases in gross monthly wage of at least $50 given to Singaporean employees in the qualifying year, up to a gross monthly wage level of $5,000, will be co-funded.|
|In addition, increases in gross monthly wage of at least $50 given in 2017, 2018 and 2019 up to a gross monthly wage level of $4,000, and sustained in subsequent years of the scheme, will be co-funded.||In addition, increases in gross monthly wage of at least $50 given in 2017, 2018 and 2019 up to a gross monthly wage level of $5,000, and sustained in subsequent years of the scheme, will be co-funded.|
Enhancements to Enterprise Financing Scheme – SME Working Capital Loan
The Enterprise Financing Scheme – SME Working Capital Loan (EFS-WCL), which is available to SMEs across all industries, will be enhanced for one year to help SMEs with their working capital needs. The Government will raise the maximum loan quantum from $300,000 to $600,000, and enhance the Government’s risk-share to up to 80% (from the current 50% to 70%) for SMEs borrowing from Participating Financial Institutions under the scheme. The Enhanced EFS-WCL will start in March 2020 and is available for one year till March 2021.
Enhancement to Adapt and Grow Initiative
WSG will enhance support under the Adapt and Grow initiative for more directly impacted sectors, such as hotel, retail, food services, tourism, and air transport. As a start, funding support duration for the following existing redeployment programmes will be extended from the current three months to a maximum of six months.
Enterprise Grow Package
- Launch GoBusiness, a single touchpoint for G2B transactions
- SMEs Go Digital programme expanded to drive greater adoption of digital technology
- Market Readiness Assistance (MRA) enhanced to help more enterprises enter new markets
Enterprise Transform Package
- New Enterprise Leadership for Transformation Programme to strengthen leadership capabilities in enterprises
- Scale up the reach of Enterprise Development Grant to support more enterprises to transform
- “70-70” target — 70% of local graduates from Institutes of Higher Learning to have overseas exposure, and 70% of the exposure to be in ASEAN, China or India
- New Asia-Ready Exposure Programme to support local youths’ visits to ASEAN, China, or India
- Enhance support for internships under Global Ready Talent Programme
Temporary Bridging Loan Programme for Tourism Sector Enterprises
A new Temporary Bridging Loan Programme (TBLP) will be introduced to provide additional cash flow support for tourism sector enterprises. Under the TBLP, eligible enterprises can borrow up to $1 million, with the interest rate capped at 5% p.a., from Participating Financial Institutions. The Government will provide 80% risk-share on these loans. The TBLP will start in March 2020 and is available for one year till March 2021.
Aviation Sector Measures
The Aviation Sector Assistance Package, co-funded by the Government, the Civil Aviation Authority of Singapore (CAAS) and the Changi Airport Group (CAG), aims to help defray business costs and protect jobs, as well as safeguard Changi’s air connectivity. The assistance will be provided for a 6-month period. The package will provide immediate relief to affected companies during the COVID-19 outbreak period.
50% Port Dues Concession
The Maritime and Port Authority of Singapore (MPA) will be giving 50% port dues concession to cruise ships and regional ferries with a port stay of not more than five days and passenger-carrying harbour craft. This will be on top of any existing concessions. This measure will be implemented from 1 March 2020 to 31 August 2020.
Rental Waivers for Commercial Tenants in Government-owned / managed facilities
To support hawkers, NEA will provide one month’s worth of rental waivers to stallholders of NEA-managed hawker centres and markets, with a minimum waiver of $200. To help alleviate costs for businesses located in other Government-owned / managed facilities, Government agencies such as HDB, PA, SLA, NParks, JTC, URA, STB and SDC will provide half a month’s worth of rental waivers to eligible commercial tenants/lessees who are on leases not exceeding three years and do not pay Property Tax. Eligible tenants/lessees may include those providing commercial accommodation, retail, F&B, recreation, entertainment, healthcare and other services.
Two-step reduction of S Pass sub-DRCs of the Construction, Marine Shipyard, and Process sectors from 20% to 15%
First reduction from 20% to 18% on 1st January 2021, and subsequently to 15% on 1st January 2023.
LIFELONG LEARNING AND EMPLOYMENT SUPPORT
- $500 SkillsFuture Credit top-up for adult Singaporeans aged 25 and above
- Support for firms to train and redesign jobs for workers
- New SkillsFuture Enterprise Credit to support firms in workforce and enterprise transformation
- Introduce job redesign support under Productivity Solutions Grant
- More than double the capacity of SkillsFuture Work-Study Programmes to boost industry readiness in our students
- Special $500 SkillsFuture Credit top-up for Singaporeans aged 40 to 60
- Increase the capacity of reskilling programmes to support more local workers in their 40s and 50s in career transitions
- Hiring incentive for employers who hire local jobseekers aged 40 and above through reskilling programmes
- Senior Employment Credit to provide wage offsets for firms hiring Singaporean workers aged 55 and above
- CPF Transition Offset to offset half of the increase in employer CPF contribution rates for senior workers
- Senior Worker Early Adopter Grant to support enterprises that increase their Retirement and Re-employment Ages ahead of legislated changes
- Part-Time Re-employment Grant to encourage firms to formalise part-time re-employment provisions
Care and Support – Cash
All Singaporeans aged 21 years and above in 2020 will receive a one-off Care and Support – Cash payout of $300, $200 or $100, depending on their income. Those who own more than one property will receive $100, regardless of their income. Parents, with one or more Singaporean children aged 20 years and below in 2020, will each receive an additional $100 in cash.
|Assessable Income for Year of Assessment 2019||$0 to $28,000||$28,001 to $100,000||More than $100,000, or owns more than one property|
|Care and Support – Cash||$300||$200||$100|
|Additional cash for parents*||$100|
Workfare Special Payment
Singaporeans who received Workfare Income Supplement (WIS) payments in Work Year 2019 will be eligible for a Workfare Special Payment (WSP) in 2020. This includes both employees and self-employed persons. The WSP will be 20% of the total annual WIS payment received for Work Year 2019, with a minimum payment of $100 (see Table 2). The payment will be given in cash and will provide additional support for low-wage workers and self-employed persons aged 35 and above in 2019.
Passion Card Top-up
All Singaporeans aged 50 years and above in 2020 will receive a $100 top-up to their PAssion Cards in 2020. This includes Merdeka Generation seniors who received a $100 top-up under the Merdeka Generation Package in 2019, as well as Pioneers.
Singaporeans aged 21 years and above, who live in 1-room and 2-room HDB flats and do not own more than one property, will receive $100 in Grocery Vouchers each year, in 2020 and 2021. Grocery Vouchers can be used at participating supermarkets. To date, NTUC FairPrice, Giant and Sheng Siong have agreed to accept these vouchers.
Additional GST Voucher – U-Save
All eligible HDB households will receive double their regular GST Voucher (GSTV) – U-Save in Financial Year (FY) 2020 (April 2020 to March 2021) through a one-off GSTV – U-Save Special Payment. Eligible households with five or more members will receive an additional GSTV – U-Save rebate in FY2020, and will thus receive a total of 2.5 times their regular GSTV – U-Save in FY2020
|HDB Flat Type||Regular GSTV – U-Save||GSTV – U-Save Special Payment||Additional GSTV – U-Save rebate||Total GSTV – U-Save for FY2020|
|For all eligible households||For eligible larger households|
|1- and 2-room||$400||$400||$200||$800 or $1,000|
|3-room||$360||$360||$180||$720 or $900|
|4-room||$320||$320||$160||$640 or $800|
|5-room||$280||$280||$140||$560 or $700|
|Executive / Multi-Generation||$240||$240||$120||$480 or $600|
Grants to Self-Help Groups and Community Development Councils
The Government will provide a grant of $10 million over two years to Self-Help Groups, and another grant of $20 million to Community Development Councils. This will help to fund community programmes to support needy households.
Service and Conservancy Charges Rebate
Eligible Singaporean households living in HDB flats will receive rebates to offset between 1.5 and 3.5 months of Service and Conservancy Charges (S&CC) over FY2020
- More Government-supported pre-school places
- Raise income ceiling for the Additional Subsidy for preschool and Kindergarten Fee Assistance Scheme (KiFAS) to $12,000 a month
- Higher pre-school subsidies across all eligible income tiers
- Annual pre-university bursary quantum raised from $900 to $1,000
- Transport subsidies increased for all students
- School meals subsidies increased for secondary school students
- Higher bursaries for students in polytechnics and autonomous universities
- Increase of up to $200 a year in cash bursary quantum for full-time ITE students
- Up to $160,000 in housing grants for first-time flat-buyers
- Monthly household income ceiling raised for subsidised flats and executive condominiums to $14,000 and $16,000, respectively
- Government will match CPF Retirement Account top-ups dollar-for-dollar, up to an annual cap of $600, from 2021 to 2025
- For lower- to middle-income Singaporeans aged 55 to 70 without the prevailing Basic Retirement Sum
- Eligible Singaporeans can receive up to $3,000 in matched savings over the five years
HEALTHCARE AND AGED CARE SUPPORT
- Healthcare subsidies of up to 80% at Public Healthcare Institutions and aged care services
- Community Health Assist Scheme (CHAS), Pioneer Generation Package and Merdeka Generation Package to provide assurance for healthcare costs
- CareShield Life and Long-Term Care Support Fund to strengthen support for long-term care
- Seniors’ Mobility and Enabling Fund to provide support for assistive devices and home healthcare items
- $5 billion for Coastal and Flood Protection Fund to protect against rising sea levels
- SG Eco Fund for community partnerships on sustainability initiatives
- HDB Green Towns Programme for all HDB towns to be eco-friendly by 2030
- Incentives for lower-income households to buy energy efficient household appliances
- Cleaner-Energy Transportation with the expansion of charging infrastructure for electric vehicles (EV) and EV Early Adoption Incentive
There you go, this is the Singapore Budget 2020 Summary. If you are a business owner or SMEs that need further assistance on any corporate services, you can contact us about your inquiry. 3E Accounting Singapore will respond back to you within 24 hours.