Singapore Budget 2021 - 8 things a small business needs to know

Updated: Feb 19

Singapore Budget 2021 is announced by the Deputy Prime Minister (DPM) & Finance Ministry Heng Swee Keat on 16 February 2021. We explore in the below the must know and take-aways that matter to all small businesses.

Guide Contents

We have grouped into 2 broad categories how Budget 2021 will impact a small business/ SME operating in Singapore. Also, this guide will describe briefly the current schemes/ programs and highlight the changes laid out in Budget 2021.


Labour related

Financing & Grants related




Job Growth Incentives (JGI) extension


Before Budget 2021:

JGI was introduced last year in 2020 to supports employers to accelerate their hiring of local workforce over the next six months, from September 2020 to February 2021, both month inclusive ("Qualifying Period").


Under JGI, the Singapore Government will support 25% (or 50% for mature local hires aged 40 and above) of the first $5,000 of gross monthly wages ("Wage Cap") paid to all new local hires for the next 12 months from the month of hire.


To be eligible for the JGI, there must be an increase in overall local workforce size AND increase in local workforce size earning ≥$1,400/month, compared to the August 2020 local workforce.


Budget 2021:

  • Qualifying Period is extended by 7 months to 30 September 2021;

  • Wage Cap is increased to S$6,000 from S$5,000; and

  • Wage support for mature local hires/ PwDs/ ex-offenders will be increased to up to 18 months (current 12 months) from the month of hire


Read more about Job Growth Incentive (JGI)




Job Support Scheme (JSS) extension


Before Budget 2021:

JSS was introduced in Budget 2020 to provide wage support to employers, helping enterprises retain their local employees (Singapore Citizens and Permanent Residents) during the period of economic uncertainty arising from COVID-19.


Under the JSS, the Government co-funds a proportion of the first $4,600 of gross monthly wages1 paid to each local employee up to March 2021.


Budget 2021:

In Budget 2021, JSS was extended by up to 6 months covering wages paid from April 2021 to September 2021 for certain businesses.


For Tiers 1 businesses such as Aviation, Aerospace, and Tourism, the JSS will be extended by a further 6 (six) months. These businesses will receive 30% support for wages paid from April to June 2021, and 10% support for wages paid from July to September 2021.


For Tiers 2 businesses such as Retail (excluding supermarkets), Arts and Cutlure, Food services and Built environment, the JSS will be extended by a further 3 (three) months. These businesses will receive 10% support for wages paid from April to June 2021.





Senior Worker Early Adopter Grant and Part-Time Re-Employment Grant


Before Budget 2021:

The Senior Worker Early Adopter Grant (SWEAG) and the Part-Time Re-employment Grant (PTRG) were introduced as part of the Senior Worker Support Package in February 2020. These grants are providing businesses up to $250,000 and $125,000 respectively to implement key recommendations to support older workers.


SWEAG provides funding support of $125,000 for employers to raise both their internal retirement and re-employment ages by 3 years above minimum statutory requirements.


PTRG provides funding support of up to $125,000 for employers that commit to a part-time re-employment policy for its eligible senior workers.


Companies can apply for either one or both grants, capped at a total funding of $250,000.


To qualify, employers also have to adopt the Tripartite Standard on Age-Friendly Workplace Practices.


Budget 2021:

The budget for SWEAG and PTRG is increased by over S$200 million to support more companies to raise their retirement and re-employment ages earlier.


More details on this program will be announced soon by the Singapore Government.




Wage Credit Scheme Extension


Before Budget 2021:

Wage Credit Scheme (WCS) was introduced in Budget 2013 and had been in place ever since to support businesses embarking on transformation efforts and encourage sharing of productivity gains with workers. In Budget 2020, the government co-funding ratios for wage increases was raised to 15% and the qualifying gross wage ceiling was also raised to $5,000.


Budget 2021:

In Budget 2021, the Scheme is further extended by one year to 2021, with the government co-funding ratio remaining at 15% and the qualifying gross wage ceiling at $5,000, ie. government will continue in 2021 to co-fund 15% wage increments for local workers whose gross wage is S$5,000 or below.




S-Pass Permit Quota Reduction


From 1st January 2022, the manufacturing sector can have only up to 18% of their workforce to be foreign workers on S passes, and this will be further reduced to 15% from 1st January 2023. Currently, it is at 20%.


The S Pass quota for construction, process and marine shipyard firms will be further reduced to 15% from 1st January 2023.


SMEs can still retain their excess S Passes holders till their S Passes expire.





Enterprise Financing Scheme (EFS) Changes


Before Budget 2021:

The Temporary Bridging Loan Programme ("TBLP") and SME Working Capital ("WCL") was introduced to help the SMEs access working capital and finance operational cashflow needs. As announced in Budget 2020, these programmes are eligible to all sectors, with 90% risk share by the government for new loan applications initiated from 8 April to 31 March 2021. Eligible SMEs can borrow up to S$5 million and S$1 million respectively under each programme, with interest rate capped at 5% per annum.


Budget 2021:

In Budget 2021, TBLP will be extended to from 1st April 2021 to 30 September 2021 but its amount will be revised down to S$3 million. Risk sharing by the government will reduce from 90% to 70% by Enterprise Singapore. It is likely the financial institutions will impose more stringent assessments and lower quantum after March 2021.


WCL will turn into a permanent programme under EFS. More details on this will soon be announced by the Singapore Government.




Enterprise Development Grant (EDG) extension


Before Budget 2021:

Businesses can tap on support for projects in three key areas - core capabilities, innovation and productivity, and internationalisation. It was announced in October 2020, the funding support will increase from 70% to 80% from 1st November 2020 to 30th September 2021. The grant funds qualifying project costs namely third party consultancy fees, software and equipment, and internal manpower cost.


Budget 2021:

In Budget 2021, it is announced that the enhanced maximum support level of up to 80% will be extended from 30 September 2021 to 31 March 2022.




Productivity Solutions Grant (PSG) extension


Before Budget 2021:

The Productivity Solutions Grant (PSG) supports companies keen on adopting IT solutions and equipment to enhance business processes. The list of readily adoptable solutions can be found on GoBusiness Gov Assist. It was increased from 70% to 80% support levels to 30th September 2021.


Budget 2021:

In Budget 2021, it is announced that the enhanced maximum support level of up to 80% will be extended from 30 September 2021 to 31 March 2022.






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