SINGAPORE: Businesses will continue to receive support in terms of managing costs with the extension of two measures.
This was unveiled on Monday (Feb 19) by Finance Minister Heng Swee Keat, who cited lingering concerns about business costs despite faster-than-expected economic growth last year. One key driver of business costs has been wage growth.
First, the Wage Credit Scheme (WCS), launched in 2013 and later extended in 2015 to help businesses cope with wage increases, will be lengthened to 2020 though the level of co-funding will be tapered.
It will provide co-funding of 20 per cent for 2018, 15 per cent for 2019 and 10 per cent for 2020. To be eligible, Singapore employees must be earning a gross monthly wage of up to S$4,000 and receive monthly pay rises of at least S$50.
This extension will cost the Government about S$1.8 billion over the next three years.
Second, the Corporate Income Tax (CIT) rebate will go up to 40 per cent of tax payable and capped at S$15,000 for the Year of Assessment 2018. This is a rise from the current 20 per cent of tax payable, capped at S$10,000.
The rebate will also be extended for another year at a rate of 20 per cent of tax payable and capped at S$10,000.
The enhancement and extension, which is expected to cost an additional S$475 million over the next two years, will benefit all tax-paying companies, especially smaller firms, said Mr Heng.
Meanwhile, to help the marine shipyard and process sectors cope with ongoing weakness, the foreign worker levy increases will be deferred for another year.
STRENGTHEN SUPPORT FOR WORKERS
Stronger employment support will also be made available to lower- to middle-income workers.
This will come in the form of an upgrade of the current Work Trial scheme into a Career Trial programme, with higher funding support to help jobseekers try out new jobs and assess new careers.
More details will be revealed in the Ministry of Manpower’s Committee of Supply.
LONG-TERM TRANSFORMATION STRATEGIES
Despite the near-term support measures in Budget 2018, Mr Heng also emphasised the need for longer-term transformation measures in response to three major shifts.
For one, the Industry Transformation Maps will take a more “cluster-based approach” to reap synergies and strengthen linkages across multiple industries, as well as explore new opportunities.
The ITMs are 23 roadmaps that were first announced in Budget 2016 as part of a S$4.5 billion industry transformation programme.
Three key enablers that lay the foundation for all the ITMs must also be strengthened, according to Mr Heng.
“By strengthening these three enablers, we can anchor Singapore as a Global-Asia node of technology, innovation and enterprise,” he said.