15 April, 2020
Singapore announced a supplementary budget to help businesses cope with the impact of COVID-19. Such measures also include, sector specific support for businesses in Aviation, Tourism, Land Transport, Maritime and Arts and Culture.
Jobs Support Scheme
Under the Jobs Support Scheme, all active employers will receive 25% cash grant on the first S$4,600 of the gross monthly wages of each local employee on their Central Provident Fund payroll. Companies in Food Services will receive up to 50% of the first S$4,600 of the gross monthly wages of each local employee (inclusive of the 25% base support). The grants are further enhanced for companies in the aviation and tourism sector, who will receive up to 75% of the first S$4,600 of the gross monthly wages of each local employee (inclusive of the 25% base support). The grants will cover 9 months of wages, and will be paid in 3 tranches to employers.
Deferment of Income Tax Payments and Tax Rebates
Corporate income tax payments due on April, May and June 2020 will be collected in July, August and September 2020, respectively.
Landlords of non-residential tax properties will also receive tax rebates, with a view that these savings should be passed onto to their tenants, in the form of rental reductions.
Enhanced Financing Support
To support the working capital of Small & Medium Enterprises (SME), the maximum loan quantum for the Enterprise Financing Scheme – SME Working Capital Loan (EFS-WCL) and the Enterprise Financing Scheme – Trade Loan (EFS-TL) will be significantly enhanced from 1 April 2020 to 31 March 2021. Increased support will also be given for the Loan Insurance Scheme (LIS) from 1 April 2020 to 31 March 2021. The Temporary Bridging Loan Programme (TBLP) (previously for tourism sector only) will be expanded to all sectors from 1 April 2020.
With these new support schemes and relief measures, the Ministry of Manpower will, more than ever, expect employers to implement wage and job cuts as a measure of last resort. Decisions to implement wage and job cuts against the backdrop of government financial support will be subject to keen scrutiny going forward.
For further information, please contact:
Goh Seow Hui, Partner, Bird & Bird
seowhui.goh@twobirds.com
