Ecovis Global > COVID-19: Support for small and medium enterprises in Singapore
COVID-19: Support for small and medium enterprises in Singapore
1. September 2020
As a result of the ongoing COVID-19 situation, the Singapore Government has announced various support schemes in the 2020 Budget to assist Small and Medium Enterprises (SMEs) through this crisis. This comprises the ‘Unity Budget’ announced on 18 February 2020, followed by two supplementary budgets, the “Resilience Budget” announced 26 March 2020 and the “Solidarity Budget” announced 6 April 2020.
The key programmes, measures and schemes being put in place to support SMEs in Singapore are summarized below.
Financial relief for SMES
Corporate Income Tax Rebate
A 25% Corporate Income Tax Rebate will be granted for Year of Assessment 2020, capped at S$15,000 per company.
Income Tax Payments Deferral
Automatic deferment of income tax payments for companies has been granted for three months.
Temporary Relief from Legal Action
The introduction of a bill in Parliament to provide temporary relief and protection for individuals and companies who are unable to fulfil their contractual obligations because of COVID-19. This is valid from 1 February 2020 for a period of six months and may be extended for up to one year.
Property Tax Rebate
30%-100% property tax rebates are given to landlords, and also ensure that landlords pass on property tax rebates in full to their tenants.
Enterprise Financing Scheme
Extended greater financing support is available to SMEs in all sectors through the Enterprise Financing Scheme. Specifically this covers the Temporary Bridging Loan, SME Working Capital Loan and Trade Loan programmes, for amounts from S$1 to S$5million to finance a business’s working capital requirement.
Special Financial Relief Programme
SMEs may choose to defer payment of principal and pay only interest on their fully secured term loans up to 31 December 2020.
Employment-related relief for SMES
Job Support Scheme
Depending on the industry, the government will co-fund 25% -75% of the first S$4,600 of gross monthly wages paid to each local employee for nine months. During ‘Circuit Breaker’ period in April and May 2020 (Singapore’s ‘stay at home’ order), all companies received 75% funding.
Wage Credit Scheme
The scheme co-funds 15% of the wage increases for Singapore citizen employees earning a gross monthly wage of up to S$5,000.
Foreign Worker Levy
A levy rebate, levy waiver and extension for payment of foreign worker levy will be given to SMEs to support their cashflow.
Further support for SMES
There are also various other support initiatives for SMEs, such as:
Startup SG Equity – providing Singapore-based startups with access to funding and mentorship. Under this scheme, qualifying startups have access to business loans, equity finance and cash grants.
SkillsFuture Enterprise Credit – providing a one-off S$10,000 payment to employers so that they may invest in enterprise and workforce transformation initiatives.
SMEs Go Digital Programme – helping SMEs seize opportunities in the digital economy and keep up with technological change.
Productivity Solutions Grant – allowing businesses to adopt IT solutions to increase efficiency.
Enterprise Development Grant – funding qualifying project costs to help company growth, specifically software and equipment, manpower costs and consultancy fees.
These grants are given for the purpose of promoting, encouraging and assisting SMEs to transform their business through innovation, invest in their employees through job redesign and employees’ skill training, build digital capabilities, upgrade their business or venture overseas.
The various initiatives and measures outlined above highlight the Singapore Government’s continued commitment to supporting SMEs during the ongoing COVID-19 pandemic, and to enable Singapore to emerge as a global financial hub post pandemic.