Reliefs for the Self-employed

Help for SMEs to cushion impact of COVID-19

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Here are some ways SMEs can receive aid from the government's relief and support measures under the Unity, Resilience and Solidarity Budgets:

  • Improve cashflow through the Jobs Support Scheme (JSS),Wage Credit Scheme, Corporate Tax Rebate and other enhancements of Tax Treatments.
  • You can withdraw the balances in your SA and OA if you have set aside your Retirement Sum in your RA.
  • Get immediate cash relief with the Enhanced Enterprise Financing Scheme – SME Working Capital Loan and Trade Loan, and Enhanced Loan Insurance Scheme.
  • Bridge short-term cashflow gaps with the Temporary Bridging Loan Programme, and get Property Tax Rebates and Rental Waivers.
  • Get financial support under Foreign Worker Levy, and for support of workforce transformation.
  • Transform your business with SME Go Digital Programme and Institutes of Higher Learning (IHL).

Much has been said about the unprecedented budget measures announced in 2020 by the Singapore government. Indeed, the reliefs and measures under the Unity, Resilience and Solidarity Budgets have been rather generous, and especially helpful in times of a health crisis and a looming recession.

By April 2020, most Singapore citizens would have received a minimum of $600 from the Solidarity payments. But amidst the ongoing circuit-breaker, many companies and small enterprises are struggling to stay afloat. In response, the government has introduced the Stabilisation and Support package to provide financial support, as well as help companies stay nimble. Other initiatives such as the Adapt and Grow initiative and the Transformation and Growth strategy will also work to help businesses thrive.

Here are 3 ways that SMEs could receive aid to help them survive the pandemic:

Stabilisation and Support Package

Jobs Support Scheme (JSS)

This is meant to help enterprises retain their local employees (Singapore Citizens and Permanent Residents) during this period of economic uncertainty. The government will co-fund the first $4,600 of gross monthly wages to each local employee for 9 months.

The government will pay 75% on the first $4,600 of monthly salaries for every local employee in April and May 2020.

Come June, the level of aid depends on the sector of the business. Those in the aviation and tourism sector will continue to receive 75% of the wage support. Those in food services will receive a 50% wage support, and those in other sectors, 25%. Employers who put local employees on mandatory no-pay-leave or retrenchment will not be entitled to the enhanced JSS payout for those employees.

Following the extension of the circuit-breaker to the 1st June 2020, the Government has extended the Jobs Support Scheme payout to cover wages of employees of shareholders and directors of a company. This support will only apply to companies that were registered on or before 20 April 2020, and for the wages of shareholder-directors with Assessable Income of $100,000 or less for Year of Assessment 2019.

Wage Credit Scheme

The Wage Credit Scheme, introduced in 2013, offers employers a partial reimbursement on the salaries they pay to employees if they sustain an annual wage increase of at least S$50 per person. In Budget 2020, it was announced that the government co-funding ratios for wage increases in 2019 and 2020 will be raised 5% to 20% and 15% respectively. The qualifying gross wage ceiling will also be raised to $5,000 for both years, up from the current $4,000.

Corporate Tax Rebate and enhancement to Corporate Tax treatment

Companies will enjoy a one-time Corporate Income Tax (CIT) rebate of 25% of tax payable, capped at $15,000 per company for Year of Assessment (YA) 2020. Other enhancements of Tax Treatments under the Corporate Tax System will also help companies improve their cashflow. These include:

  • Companies paying their CIT by GIRO can automatically enjoy an additional 2 months of interest-free instalments, when they file their Estimated Chargeable Income (ECI) within 3 months from their Financial Year End.
  • Allow up to $100,000 of the unabsorbed capital allowances and trade losses for YA2020 to be carried back up to three immediate preceding YAs, instead of one preceding YA;
  • Option to accelerate the write-oof the cost of acquiring plant and machinery (P&M) in financial year 2020) over 2 years; and
  • Provide an option to accelerate the deduction of expenses incurred on renovation and refurbishment (R&R) in financial year 2020

Enhanced Enterprise Financing Scheme – SME Working Capital Loan and Trade Loan

The Enterprise Financing Scheme – SME Working Capital Loan (EFS-WCL), which is currently available to SMEs across all industries, will be enhanced for 1 year until 31 March 2021.

The maximum loan quantum will be raised to $1 million and the government’s risk-share will increase to 80% (from the current 50% to 70%) for SMEs borrowing from Participating Financial Institutions under the scheme.

The Enterprise Financing Scheme – Trade Loan (EFS-TL) supports Singapore-based enterprises’ trade financing needs, such as the financing of short-term import, export and guarantee needs. The EFS-TL will also be enhanced for 1 year till 31 March 2021, where the government will raise the maximum loan quantum from $5 million to $10 million, and enhance the Government’s risk-share to 80% (from the current 50% to 70%) for enterprises borrowing from Participating Financial Institutions under the scheme.

The Monetary Authority of Singapore (MAS) on April 20 2020 has launched the MAS SGD Facility for ESG Loans in partnership with Enterprise Singapore to lend Singapore Dollars at a low interest rate of 0.1% per annum to eligible financial institutions. This is to support the lending to SMEs under the ESG Loan Schemes. The ESG Loan Schemes comprise the Enhanced Enterprise Financing Scheme - SME Working Capital Loan (EFS-WCL) and the Temporary Bridging Loan Programme (TBLP).

This facility will help financial institutions to make loans to SME borrowers more affordable, and in turn help SMEs manage their cash flow better amidst the current COVID-19 pandemic.

Enhanced Loan Insurance Scheme

The Loan Insurance Scheme (LIS) is a government risk-sharing scheme that helps SMEs to obtain trade financing. Announced as part of the supplementary Budget 2020, support for the LIS insurance premium will be increased to 80% (from 50%) until 31 March 2021.

Adapt and grow initiative – To help sectors affected by COVID-19

Temporary Bridging Loan Programme

The Temporary Bridging Loan Programme (TBLP) is a new relief assistance for businesses impacted by the COVID-19 pandemic. Companies will be able to access working capital to bridge short-term cashflow gaps. The maximum loan quantum for TBLP will be increased to $5 million, with the interest rate capped at 5% p.a. The Government will provide 80% risk-share on these loans.

Property Tax Rebates

Non-residential properties will be granted a rebate for Property Tax (PT) payable for the period 1 Jan 2020 to 31 Dec 2020.

Commercial properties that are badly affected by COVID-19 like hotels, serviced apartments, tourist attractions, shops and restaurants will receive a 100% rebate. Other non-residential properties such as offices and industrial properties will get a 30% rebate on their property tax payable.

IRAS will send out the rebate notices by 31 May 2020. Property owners can expect to receive their refunds by 30 June 2020.

Rental Waivers

Since most businesses will have to continue paying rent despite closure of business during the circuit breaker, the government has introduced rental waivers for tenants in government-owned/managed non-residential facilities.

The following tenants will qualify for rental waivers:

  • Stallholders of hawker centres and markets - Stallholders who qualified for the one month’s worth of rental waiver announced in Budget 2020 will now get 3 months’ worth of rental waiver, with a minimum waiver of $200 per month.
  • Commercial tenants - Commercial tenants who qualified for the half a month’s worth of rental waiver announced in Budget 2020 will now get 2 months’ worth of rental waiver in total. Eligible tenants may include those providing commercial accommodation, retail, F&B, recreation, entertainment, healthcare, and other services.
  • Other non-residential tenants - Government agencies such as JTC, SLA, HDB, URA, BCA, NParks, and PA will provide half a month’s worth of rental waiver to eligible tenants of other non-residential premises who do not pay property tax. Eligible tenants may include those in premises used for industrial purpose, or as an office, a business or a petrol station.

To help enterprises navigate the structural changes in the global economy, the government will implement the Transformation and Growth Strategy over the next 3 years. The 3 key areas of the strategy include workforce development, deepening enterprise capabilities and enabling stronger partnerships.

Waiver and Rebate for Foreign Worker Levy

The government will waive the foreign worker levy due in April and May 2020, as well as a Foreign Worker Levy Rebate of $750 in April and May 2020 from levies paid this year, for each Work Permit or S Pass holder.

Support for transformation of workforce

More support will be given to companies in their transformation journey amidst major structural changes in the global economy.

On top of a one-time S$500 SkillsFuture top-up for every Singaporean aged 25 and above, enterprises will also benefit from the Government’s new SkillsFututre Enterprise Credit.

Under this scheme, each firm will receive S$10,000 to cover up to 90% of out-of-pocket expenses for workforce or business transformation.

Hiring incentive

A hiring incentive will be provided to employers hiring local jobseekers aged 40 and above through a reskilling programme. The government will provide 20% salary support to the employer for six months, capped at $6,000 in total.

The Senior Employment Credit will also provide employers with wage offsets when they employ Singaporean workers aged 55 and above.

SMEs Go Digital Programme

The SMEs Go Digital programme launched in 2017 aims to help SMEs use digital technologies to build stronger digital capabilities. The programme will be expanded to include the implementation of the Industry Digital Plans to 23 industries so that enterprises have access to pre-approved digital solutions.

Deepening workplace learning capabilities

The National Centre of Excellence for Workplace will be expanded to two more Institutes of Higher Learning (IHL) over the next few years, benefitting over 1,200 enterprises, especially SMEs.

Budget 2020 series

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