⚡️We will be adding more information to this article shotly, so stay tuned! ⚡️
The Singapore government developed a set of measures to help people and local companies survive the economic slump caused by the COVID-19 outbreak. A total of S$55 billion is allocated.
Many state initiatives are aimed at helping companies maintain healthy cash flow, cut the costs, and preserve access to credit no matter how hard they are hit.
Below we list 4 initiatives that will save you thousands of dollars and help to protect your staff.
The state will cover up to 25% of your local employees’ salaries
The Jobs Support Scheme was first introduced in Budget 2020, and now its terms become even better.
Under the Jobs Support Scheme (JJS), the state will reimburse up to 25% of every salary you pay to your local employees — citizens and permanent residents.
The monthly wage cap is now set at S$4,600. Here’s how it works:
- If your employee’s gross monthly salary is less than S$4,600, you will get 25% of what you pay them.
- If your employee earns more than S$4,600, you will get the maximum payout — a quarter of S$4,600, or S$1,150.
The most affected industries will get more support:
- Food & Beverage — a 50% refund;
- Aviation — a 75% refund;
- Travel (including licensed hotels, gated tourist attractions, and MICE venue operators) — a 75% refund.
The exception will be the businesses owners on payroll — their salaries won’t be co-funded regardless of the industry.
Companies are signed up for the Jobs Support Scheme automatically, so there’s no need to apply. IRAS will notify you about the payments and then transfer money in May, July, and October 2020.
IRAS will calculate your JSS payouts using the CPF contributions data — so make sure your company transfers these in time.
Your income tax payments are postponed for 3 months
Companies get a 3-month deferment from income tax. The payments will start in July 2020.
The tax payments are postponed automatically — there’s no need to apply for it.
If you made money last year and need to pay tax this year, you will delay paying for 3 months, so you can use the cash to meet other urgent needs.
You will pay less or no property tax in 2020
Hotels, service apartments, tourist attractions, shops, and restaurants will pay no property tax.
Businesses in other non-residential properties (e.g. offices) that are subject to property tax will pay 30% less than before.
There’ll be no government fees and charges for 1 year
The Ministry of Finance freezes all government fees and charges for 1 year, from 1 April 2020 to 31 March 2021.
The state protects your access to credit
It’s important that businesses have access to credit during these hard times. Here are the programs that were enhanced:
The Loan Insurance Scheme helps a company get short-term trade financing by insuring banks against the company going under.
- Subsidies to businesses for loan insurance premiums under the Loan Insurance Scheme increase to 80%.
Enterprise Financing Schemes (EFS)
EFS – Trade Loan finances trade needs.
- You can now borrow up to S$10 million.
- The Government’s risk-share goes up to 80%.
Under the Temporary Bridging Loan Programme, enterprises can borrow up to S$5 million with the yearly interest rate of up to 5%. The Government provides 80% risk-share on these loans.
- The programme is now available for companies from all industries, not just from tourism
- The maximum supported loan is now S$5 million
EFS –SME Working Capital Loan finances daily operational needs.You can now borrow up to S$1 million
Stay strong, guys
Singapore is now pouring more money into supporting us than it did during the financial crisis of 2009. However, Singapore won’t be able to isolate itself from the global economic downturn. The hard times are coming.
But who knows, maybe the COVID-19 problem is an opportunity in disguise. Digitised businesses that provide services remotely will be the most comfortable during the global lockdown. It looks like now more traditional companies have an incentive to evolve and catch up.
Other countries are already learning their COVID-19 lessons. It turns out that most of the office work can be done remotely, meetings are useless 90% of the time, and the traditional education with all those textbooks and classrooms is obsolete. Singapore can't help but draw its own meaningful lessons from the pandemic.
And for now, let us stay active and support each other, both as companies and as people. Take care!