How Will the Singapore Government Safeguard Businesses During Covid-19?
As Covid-19 continues to impact human lives and health, there is another disaster looming ahead. It is the economic crisis and its grave impact on the small and big businesses. The Singapore government has devised various measures to help the people and local companies to cope with this economic collapse. These initiatives will help the companies to preserve access to credit, cut costs, and ensure healthy cash flow.
Check out some of the initiatives by the state to help you save money and safeguard the interests of your staff.
Your Income Tax Payments are Deferred for Three Months
If you are self-employed, a freelancer, or run a business, your income tax payments will be granted a deferment for the months of April, May, and June. By collecting tax from July, the Singapore government will try to ease your immediate cash flow concerns. Those eligible need not make an application in this regard. They are granted an automatic deferral period and The Inland Revenue Authority of Singapore (IRAS) will not make any GIRO deductions during this period.
Jobs Support Scheme to Help You Pay Your Employees
The government has initiated Jobs Support Scheme and Wage Credit Scheme which will enable the businesses to pay their employees. The government has planned to raise its co-funding to 25 percent of wages for all local workers. In addition to that, the sectors that are more affected by the pandemic will receive more support. This includes the aviation sector, with 75 percent of co-funding and food services with 50 percent of co-funding. The travel sector, which includes licensed hotels, MICE venue operators, and gated tourist attractions, will also receive a funding of 75 percent.
The qualifying wage cap is now set at S$4,600. Here is how your employees will benefit:
- If an employee of your company earns more than S$4,600 per month, you will receive a quarter of S$4,600, or S$1,150
- In case, your employee’s gross monthly salary happens to be less than or up to S$4,600, you will obtain a 25 percent compensation of the amount you pay them.
Your Jobs Support Scheme (JSS payouts) will be calculated by the IRAS with the help of the CPF contributions data. Therefore, the onus is on you to make sure that your company transfers these on time.
The exception to this Job Support Scheme is the business owners on the payroll. Their salaries will not be co-funded, irrespective of their industry.
Government Help in Supporting Your Company’s Foreign Workers
The MOM’s support scheme also extends to businesses that employ foreign workers. If you happen to be an employer who had paid the December 2019 levy in full, you will be provided with a rate of $750 for each S Pass holder employed by you as of 29 February 2020.
In addition to this, the levy payment deferment measure allows the SMEs a period of 5 months to pay levies they incur each month. This scheme applies to SMEs who do not employ more than 200 people and all levies that have been incurred in 2020.
Relief from Property Tax
As a part of the Resilience Budget, service apartments, restaurants, hotels, shops, cruise and ferry terminals, international airports and other tourist attractions are eligible for a 100 percent rebate on property tax. Note that businesses that operate in non-residential properties will need to pay a property tax that is 30 percent less than before.
Government to Freeze Fees and Charges for a Year
The government has decided to freeze the fees and charges for all government services, beginning from 1 April 2020 to 31 March 2021. This means that though the fees and charges will continue to be collected, they will not be increased for a year. They will be collected at the current rates. This applies to:
- HDB flat application fees
- School fees
- Passport renewal fees
- ACRA company registration fees
- LTA and STB license fees
- NEA inspection fees
- Certification of government documents
Though the government does not waive all fee collections, they offer rebates, cash payouts, and rental waivers among others.
Temporary Relief from Contractual Obligations
The pandemic has taken a toll on people and restricted many from fulfilling their contractual obligations. The government addresses this by deferring some of the contractual obligations including the construction contract or supply contract, provision of goods and services in catering, events, and venues, some loan facilities, licenses for non-residential immovable properties, payment of rent and repayment of loans among others.
Financing Support to SMEs
The Singapore government offers the following financial support to alleviate the cash flow requirements of the enterprises.
EFS – Trade Loan
To be eligible for the Enterprise Financing Scheme – Trade Loan (“EFS-TL”), the company should be registered with the ACRA as a business, company, or firm and operating in Singapore. They should have a minimum of 30 percent local shareholding. This programme will offer credit for your trade requirements. The enterprises may:
- Borrow up to S$10 million from PFIs
- The government will offer a 90 percent risk share on these loans
EFS-Working Capital Loan
In order to be eligible for SME Working Capital Loan (“EFS-WCL”), the company should be registered with ACRA as a sole proprietorship, limited liability partnership, partnership, or company that is physically present in Singapore. This programme offers access to working capital for cash flow requirements. The enterprises may:
- Borrow up to S$1 million from PFIs
- The government offers a 90 percent risk share on these loans
Temporary Bridging Loan Programme
To be eligible for the Temporary Bridging Loan Programme (“TBLP”), the company should be registered with ACRA as a sole proprietorship, limited liability partnership, partnership, or company which is physically present in Singapore. With this programme, you will obtain access to working capital for your business needs. Under this, enterprises may:
- Borrow up to S$5 million
- The Government will offer 90 percent risk share on these loans
In addition to all these measures, the Monetary Authority of Singapore has joined hands with banks to help businesses ride through this crisis. Though the pandemic has made a heavy impact, the government assures its best to protect small and large businesses alike.