COVID-19 Budget: Income tax payments for companies, self-employed people delayed for 3 months
SINGAPORE: Companies and self-employed people will get an automatic deferment of income tax payments for three months, announced Deputy Prime Minister Heng Swee Keat in Parliament on Thursday (Mar 26), amid an economic slowdown caused by the COVID-19 outbreak.
The deferment is part of a slew of measures under a S$48 billion Resilience Budget announced by Mr Heng to provide additional support to workers, businesses and households.
This follows the S$4 billion Stabilisation and Support Package for workers and firms announced during the Budget in February.
Companies will not have to make income tax payments due in April, May and June, said Mr Heng, meaning that payments will only be payable from July.
This will allow them to use the cash that has been freed up to meet other urgent needs, Mr Heng said.
For self-employed persons, income tax payments due in May, June and July will be deferred, he added.
“Employees may approach the Inland Revenue Authority of Singapore if they need help with their income tax payments, and wish to avail themselves of this arrangement,” he said.
READ: COVID-19 Resilience Budget: ‘Landmark’ S$48 billion package to tide Singapore through ‘unprecedented’ crisis
READ: Budget 2020: 5 things to know about plans to help workers and businesses amid COVID-19 challenges
To ease the load of qualifying commercial properties that may have been “more badly hit” by the COVID-19 outbreak, property tax will be suspended for the year, said Mr Heng.
These commercial properties include hotels, restaurants, shops, tourist attractions and serviced apartments.
This is an enhancement over the support measures Mr Heng announced in response to the outbreak during this year’s Budget in February, Mr Heng said. At the time, he said these properties would receive 15 per cent to 30 per cent property tax rebate.
Businesses in other non-residential properties such as offices and industrial properties will be granted a property tax rebate of 30 per cent this year, as they are also affected by the COVID-19 situation, Mr Heng added.
LANDLORDS URGED TO FULLY PASS ON REBATE
He “strongly urged” landlords to fully pass on the rebate to tenants, by reducing rentals, to directly ease the cash flow and cost pressures faced by them.
“Many businesses have pointed out that it will be a lose-lose situation if landlords do not support their tenants. After all, if tenants fail, the properties will be empty,” he said.
“So my message to landlords is: Do your part, chip in, and give additional help to tenants who are more badly hit.”
The Government will lead by example, he said.
The National Environment Agency (NEA) will give stallholders in hawker centres it manages or NEA-appointed operators three months of rental waiver, up from the one month announced during the Budget.
Other Government agencies, such as the Housing & Development Board and the National Arts Council will provide two months of rental waiver to eligible tenants, such as social service agencies and charities, Mr Heng said.
This is up from half a month previously announced. All other non-residential tenants will receive half a month of rental waiver.
ENHANCED FINANCE SCHEMES
Additionally, said Mr Heng, S$20 billion of loan capital will be set aside in this Budget, Mr Heng said.
“This will help support good companies with strong capabilities, and catalyse private sector loan capital. As the situation is fluid, we will seek to provide help where the credit needs are more acute,” Mr Heng said.
Mr Heng also announced enhancements to several financing schemes “so that even the hardest-hit businesses can continue to have access to credit”.
For instance, to support businesses’ trade financing needs, Mr Heng said he will double the maximum loan quantum for the Enterprise Financing Scheme-Trade Loan from S$5 million to S$10 million, and increase the Government’s risk-share from up to 70 per cent, to 80 per cent.
Subsidies to businesses for loan insurance premiums under the Loan Insurance Scheme will also increase from 50 per cent to 80 per cent.
The Temporary Bridging Loan Programme, which was previously only for enterprises in the tourism sector, will be extended to all sectors. The maximum supported loan amount will also be increased from S$1 million to S$5 million.
Small and medium enterprises that require further support can continue to tap on the EFS-SME Working Loan Capital, which has a S$1 million maximum loan quantum, up from S$600,000, Mr Heng said.
The Monetary Authority of Singapore (MAS) is working with banks and insurers to see how best to help businesses and individuals facing cash flow challenges with their loan obligations and insurance premium payments, he added. Details will be announced by MAS and the industry at a later date, he said.
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GIVING PEOPLE LEGAL RELIEF
While the measures deal with helping people in financial terms, Mr Heng said giving people relief from legal obligations that have arisen because of the COVID-19 situation is an “important and complementary part”.
He provided an example of individuals who may have placed deposits for large gatherings that will not be able to proceed.
“It is not their fault that the gathering cannot go ahead. Should the deposits be simply forfeited? That won’t be right,” he said.
The Government is studying the issue and the Minister for Law will present a set of measures next week to deal with this, he said.
IMPORTANCE OF INVESTING IN R&D
Mr Heng noted that the COVID-19 outbreak has reinforced the importance of investing in research and development to prepare for critical challenges such as managing pandemics and ensuring food security.
Singapore’s investments in R&D have borne fruit, said Mr Heng, citing how Singapore was one of the first countries to successfully develop COVID-19 test kits.
COVID-19 has also emphasised the importance of having resilient supplies of food and other essential items, Mr Heng said.
Singapore is building up its national stockpile of health supplies such as masks and hand sanitisers, and is strengthening its food resilience for the long term, Mr Heng said.
“Some may be concerned about the impact on our food supplies, arising from supply chain disruptions. We need not worry,” he said, assuring Singaporeans that the country has in place a multi-pronged strategy to ensure that its people continue to have a stable supply of safe food.
READ: Singapore's economy contracts by 2.2% in Q1 as COVID-19 outbreak hits construction, services sectors
BUILDING ECONOMIC RESILIENCE
At the industry level, all firms have a part to play in building economic resilience, as the country prepares for recovery, Mr Heng said.
This is why the Government introduced the SG Together Enhancing Enterprise Resilience (Steer) programme, he said. The programme supports industry-led initiative to help companies tide over today’s economic uncertainties, and build longer-term capabilities.
The Government will now match S$1 for every S$2 raised by trade associations and chambers, or business groups for qualifying initiatives. It previously matched S$1 for every S$4.
Support for skills upgrading will also increase, Mr Heng said. All employers will receive 90 per cent absentee payroll rate to provide additional cash flow relief when they send their employees for training from May 1 this year, he said.
He also said that Singaporeans may make early use of the base S$500 SkillsFuture Credit Top-up for select courses from Apr 1 this year, ahead of the full implementation date in October.
“I hope this will help many more workers, jobseekers, and self-employed persons make use of the downtime to learn, develop new skills and stay employable,” he said.