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Singapore Budget 2021 primarily focuses on continued economic restructuring with support for Singaporeans, workers, and businesses, especially those in the hardest-hit sectors.
The Singapore government unveiled a S$11 billion to support the continued fight against the pandemic as well as towards the gradual opening of the economy. Here are some of the key themes highlighted by our team of experts in Singapore:
Support for Workers and Businesses
– Job Support scheme (“JSS”)
JSS will be extended for firms in Tier 1 and 2 sectors by up to 6 months, covering wages paid
from April 2021 to September 2021. The support levels will be tiered based on recovery of the
various sectors as follows:
• Tier 1 sectors (Aviation, Aerospace and Tourism) will receive 30% JSS support for wages
paid from April to June 2021 and 10% JSS support for wages paid from July to September
2021.
• Tier 2 sectors (Food services, Retail, Marine & Offshore and Arts and
Entertainment) will receive 10% JSS support for wages paid from April to June 2021.
For most sectors not covered above, the tranche of JSS announced last year will continue to
cover wages up to March 2021.
– Job Growth Incentive (“JGI”)
The JGI qualifying window will be extended by seven months. JGI supports employers to
expand the hiring of local employees between March 2021 and end-September 2021 to receive
wage support as follows:
• subsidies to eligible employers of 25% on first $5,000 of gross monthly wages paid to
non-mature local hires (below 40 years old) up to 12 months form the month of hire, if
the employers continue to meet the eligibility criteria.
• for mature workers aged 40 and above, persons with disabilities and ex-offenders, up
to 18 months based on 50% of the first $6,000 of gross monthly income.
Tax Changes for Businesses
– Extension of Budget 2020 temporary tax measures to support businesses
• Extension of the enhanced carry-back relief scheme for the Year of Assessment (“YA”) 2021 with the same parameters.
• Accelerated write-off of the cost of acquiring plant and machinery (“P&M”). The option to accelerate the write-off of the cost of acquiring P&M in YA2021 will be extended to cover capital expenditure incurred on the acquisition of P&M in the basis period for YA2022 with the same parameters.
• Accelerated deduction of expenses incurred on renovation and (“R&R”). The option to claim accelerated R&R deduction in one YA will be extended to qualifying expenditure incurred on R&R in YA2022, with the same parameters
– Key changes to Goods and Services Tax (“GST”) regime
The GST will take place in coming years and businesses with cross-border activities would need to plan ahead accordingly:
• GST rate increase will not take effect in 2021.The planned GST increase from 7% to 9% will take place between 2022 and 2025, subject to the economic outlook in Singapore;
• GST will be extended to low-value imported goods and business-to-consumer (B2C) non-digital services with effect from 1 January 2023
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