Singapore’s Government financial aids for SMEs to sustain COVID-19

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Support is on the way! As the world tries to cope with the pandemic caused by the Coronavirus (COVID-19), the Singapore Government has been busy in trying to tackle every aspect of the crisis.

For businesses that are impacted by the restrictive measures implemented by the Singapore Government and the effect of the pandemic, there is a sizeable portion of the overall budget dedicated to their support.

The financial budget released in February 2020 has been enhanced a few times and we are unsure if new measures will continue to be rolled out. We will continue updating this article with the latest news as the details become publicly available via the official channels.

Here is the timeline:

Unity Budget

is released

18 Feb 2020

Circuit Breaker (CB)*

Is introduced

3 April 2020

New measures

to support CB

21 Apr 2020

 

Resilience Budget

Is released

26 Mar 2020

Solidarity Budget

Is released

6 Apr 2020

 The Circuit Breaker consists of a number of social distancing measures adopted by the government to limit the escalation of COVID-19 infections. One key measure is related to the closure of all offices and establishments that are not considered operating in an essential service line.

We have selected the most relevant measures that go to support SMEs and have indicated the key aspects of them below

 

JOB SUPPORT SCHEME (JSS)

Under the Job Support Scheme the Singapore Government will co-fund part of wages* of local employees for 9 months.

According to the sector in which the companies operate there are different % of funding available (Tier 1 to 3). Generally speaking, Tourism and Aviation sectors receive a 75% subsidy (Tier 1), Food and Beverage sector receive a 50% subsidy (Tier 2), whilst all other sectors receive a 25% subsidy (Tier 3).

Businesses are able to check what sort of % co-funding they are entitled to at the following link.

Businesses that believe to be entitled to other Tiers that is assigned to them can appeal via submitting this form.

* The support will be calculated to a cap of SGD 4,600 of the gross wages paid to local employees.

This financial support has been enhanced twice:

  • First enhancement:
    • Released on the 6th of April in view of the Circuit Breaker. All Businesses are able to receive the support calculated on the basis of Tier 1 for the month of April 2020.
  • Second enhancement:
    • Released on the 21st of April in view of the extension of the Circuit Breaker. All Businesses are able to receive the support calculated on the basis of Tier 1 for the month of May 2020.
    • Shareholders and directors are now also included in the scheme.

A Calculator as well more relevant details are indicated under the IRAS website.

How to apply

Companies do not need to apply to receive the support. The Government will be able to automatically compute the amounts of co-funding by calculating backwards from the CPF contributions made to the local employees.


 

WAGE CREDIT SCHEME (WCS)

The Wage Credit Scheme is not a new measure introduced due to the COVID-19 pandemic emergency. The WCS however has been enhanced to provide more financial support for SMEs and any relevant payouts were processed in March 2020.

The WCS is a financial support ideated to support rising wages costs of employers. Employers that have retained their staff and offered wage increments throughout the past years are co-funded a portion of the wage increments.

A quick guide is provided here under the IRAS website.

 

How to apply

Companies do not need to apply to receive the support. The Government will be able to automatically compute the amounts of co-funding by calculating backwards from the CPF contributions made to the local employees.


 

FOREIGN WORKER LEVY (FWL) REBATE

If you hired foreign skilled and semi-skilled workers you would have had to pay a monthly levy, which varies according to your company’s quota.

The Government announced that the levy payable for March 2020 (payable in April 2020) is waived and in addition there will be a one-off payout of SGD750 for each work pass holder of S pass holder for levies paid in 2020.

How to apply

Companies do not need to apply to receive the support. Companies are encouraged to sign up for a Corporate PayNow account to receive the payout directly to their bank account, otherwise a cheque will be mailed to their registered office address.


 

SGUNITED TRAINEESHIP (for Corporates)

Between March and June a large number of polytechnics and university students would undergo their final exams and graduations. Graduating in these uncertain times causes apprehension on the ability to secure full time jobs.

Companies will be able to hire fresh graduates as trainees for a period of up to 12 months with a heavy subsidized rate of 80%.

The host companies (must be registered or incorporated in Singapore) will need to provide a clear program and a development plan for the trainees, and make the hires before the 31st December 2020.

More information can be found under the Skills Future website.

How to apply

Companies need to submit their interest in the program by filling up this form. The relevant authorities will then be in touch and the program managers help you kickstart the application process.


 

OTHER KEY INITIATIVES

Cashflow support:

A number of loan options have been enhanced with the government taking up a larger risk share % in case of default. This means that the banks will more likely approve the loan applications due the fact the government is taking up a risk-share up to 80% of the lent sums should there be a default by the borrower.

Many types of loans are available and mostly summarized under the Enterprise Singapore website.

Enterprise Development Grants have also been enhanced with a support level raised up to 80% and on a case by case basis up to 90% for the period of 1st April 2020 to 31st December 2020.

A summary of initiatives managed by Enterprise Singapore that have been enhanced by the Budget 2020 revisions can be found here.

Other measures indicated by the Monetary Authority of Singapore (MAS).

Income and other tax-related initiatives:

Deferral of corporate income tax payments: Taxes due in the months of April, May and June 2020 will be granted an automatic three-month deferment

25% corporate income tax rebate (capped at S$15,000) for Year of Assessment 2020

Property tax rebates ranging from 30%/60%/100% for calendar year 2020. More information under the IRAS website.

An upcoming legislative provision is being worked out to impose obligations on property owners to pass on the property tax rebate to tenant. This is still being worked out and the media release by the government can be found here.


 

INDIVIDUALS

 

Although this article is focused on Corporate help, we are not forgetting individuals. This page is very helpful and it also details whether there’s an auto-inclusion of the support or if individuals need to apply.

 


Conclusion

We remain available to provide support and guidance during this difficult period.

Should you have any questions, feel free to reach out to us.

 

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