Employers and business can call for an early Christmas celebration this Budget as the Singapore government pledged to help them with hundreds of millions in tax rebates and wage supplement.
Finance Minister Heng Swee Keat announced the following measures which he claimed “address near-term concerns”:
1) Government to spend S$5 billion (7.3%) more this year in public spending
There will be more public building works as the government ramp up on infrastructural spending to accommodate a rising population.
2) Employers to receive a total of S$1.9 billion this month in wage subsidies
Under the Wage Credit Scheme, the Singapore government will be spending the largest ever to subsidize employers for their wages overheads.
3) S$1 billion of tax rebates over two years
Employers will be showered with higher tax rebates and this cost the Singapore taxpayers close to S$1 billion over two years. The Corporate Income Tax Rebates will increase from 30% to 50% of tax payable, with a cap of S$20,000 each year for 2016 and 2017.
4) Additional wages subsidies up to S$1.1 billion
Between 2017 and 2019, the following wages of around 340,000 workers will be paid for by the Government:
55-79: Up to 3% of monthly wages
60-64: Up to 5% of monthly wages
65 and above: Up to 8% of monthly wages
5) Government to co-share 50% default risk up to more than S$2 billion of business loans
A new scheme called SME Working Capital Loan will have the Government co-share 50% default risk with the banks for business loan applications.
6) No further increase of foreign worker levies
The only business sector not cheering this Budget is probably only the property sector as the Finance Minister said he believes it is still premature to remove the property cooling measures.