Singapore’s Finance Minister; Mr Heng Swee Kiat delivered the country’s Budget Statement on 18 February 2019. Calling it ‘expansionary’, Budget 2019 focuses on broader economic changes and enhances enterprise transformation. This year, the government will be rolling out several initiatives for businesses in Singapore. This blog post will give you an overview of the key features of these initiatives, and what it means for you and your business.
Helping businesses grow, and build up their enterprise capabilities.
1. Launch of Scale-up SG and Innovation Agents Programmes
Scale-up SG is actually a continuation of Start-up SG launched 2 years ago. This programme aims to help local firms to deepen their capabilities and internationalise. The Innovation Agents programme is a two year pilot to help firms obtain advice on innovation opportunities from industry professionals who have both technology expertise and business experience. More details on both these programmes will be announced soon, but eventually both programmes will in result in generating good jobs, better career opportunities and wage growth for local workers.
2. Launch of SME Co-Investment Fund III
The government is setting aside additional $100 million for the SME Co-Investment Fund III. This will continue the work of earlier SME Co-Investment Funds, with the aim at catalysing private-sector funding in Singapore. Such investments have a direct correlation to investments and employment in Singapore.
3. Launch of Enterprise Financing Scheme (EFS)
Expected to launch in October 2019, the EFS will streamline eight existing financing initiatives to help SMEs navigate between the various financing schemes.
4. Extension of the Automation Support Package (ASP) and the SME Working Capital Loan
The ASP will be extended for 2 more years to continue supporting companies in their automation, productivity and scale-up efforts. Similarly the SME Working Capital Loan will also be extended for another 2 years to continue addressing the financial needs of smaller companies, through unsecured loans, with the government sharing risks with participating financial institutions.
5. Expansion of the SMEs Go Digital Programme
Introduced in Budget 2017, this programme will now expand to include more sectors such as accountancy, sea transport, and construction, with more sectors to be included later in the year. Info-Communications and Media Development Authority (IMDA) which facilitates this programme will also be extending the range of pre-approved solutions such as artificial-intelligence (AI) infused solutions and cyber-security solutions that can be readily adopted by SMEs.
6. Extension & Enhancement of the Productivity Solutions Grant (PSG)
Introduced in Budget 2018, the PSG aims to support enterprises to adopt readily available off the shelf productivity solutions and technologies. Following Budget 2019, the PSG support level of 70% will be extended to 31 March 2023 and it will be further enhanced to include a component that supports upgrading of employees.
7. Extension of Enterprise Development Grant (EDG)
The government will be extending and enhancing the EDG support of up to 70% to 31 March 2023. EDG was introduced in Budget 2018 to help firms adjust to the impending foreign workforce policy changes.
8. Launch of Digital Services Lab (DSL)
This is a three year pilot programme that aims to address digitalization challenges in the services sector using digital capabilities. It will focus on projects with industry-wide impact, involving various stakeholders and where there are barriers to digitalization. DSL engineers and systems architects will collaborate with various industry partners to develop solutions addressing the identified problem(s). Participating companies either as users or technology solutions provider may apply for funding support of up to 70% of qualifying costs.
9. Launched of a one-stop portal
The Ministry of Trade and Industry (MTI) and relevant agencies are developing a one-stop portal to make it easier for businesses to transact with the Government. A pilot will be launched for the food services sector by the third quarter of 2019. After this, businesses will deal with one point of contact, instead of up to 14 different ones as they do today.
Helping businesses build strong partnerships in Singapore and internationally.
10. Launch of Local Enterprise and Association Development (LEAD) Programme
This programme will strengthen the government support for Trade Associations and Chambers (TACs) by developing five year roadmaps of a more strategic and longer-term approach in driving industry transformation and gain access to funding.
11. New Centres of Innovation
Two new Centres of Innovation (COIs) will be set up focusing on aquaculture and energy as part of the government’s effort to assist SMEs with technology innovation. The aquaculture COI will support growth and internationalization of local enterprises, while the energy COI aim to drive industry-led innovation in energy efficiency, renewable energy and electric mobility. These COIs will be housed in Temasek Polytechnic and Nanyang Technological University.
12. Singapore as an Innovation Node
Singapore Fintech Festival and the Singapore Week of Innovation and Technology will happen on the same week in mid-November. These events will maximise efforts to attract the global innovation community to Singapore and foster opportunities for potential collaborations.
Tax Changes for Singapore Businesses Highlighted in Budget 2019.
13. Discontinuation of Property Tax Order for Tourists Projects
This scheme has lapsed since 18 February 2019. Introduced in 1987, this scheme was aim to promote tourism in Singapore wherein approved tourism projects had their annual value computed based on 6% of the preceding year’s gross receipts, applicable for the first 5 years upon completion of the project.
14. Extension of Written Down Allowance (WDA)
WDA incurred in acquiring qualifying Intellectual Property Rights (IPRs) will be extended to cover qualifying capital expenditure acquired on or before the last day of the basis period for YA2025, instead of YA2020.
15. Extension of Income Tax Concessions for S-REITs, REITs ETFs and GST Remission for S-REITs and RBTs
Existing tax concessions for S-REITs (Singapore-listed Real Estate Investment Trusts) and REITs ETFs (Real Estate Investment Trusts Exchange-Traded Funds) will be extended to 31 December 2025. To facilitate the listing of S-REITs and RBTs (Singapore-listed Registered Business Trusts) in infrastructure, ship and aircraft leasing, the GST remission will be extended to 31 December 2025. The Monetary Authority of Singapore (MAS) will be announcing more details by May 2019.
16. Changes in Tax Incentives for Funds managed by Singapore-based fund managers
This tax incentive scheme including its concession to claim GST incurred on expenses at a fixed recovery rate, will be further refined and extended to 31 December 2024 instead of 31 March 2019.
Tax Changes for Individuals Highlighted in Budget 2019
17. Rebates on Personal Income Tax for YA2019
As part of the Bicentennial Bonus, a personal income tax rebate of 50% of tax payable, capped at $200, will be granted to all resident individual taxpayers for YA2019.
18. Tightening of GST (Goods and Services Tax) Import Relief for Tourists
GST import relief for tourists is tightened on the first $100 (for travellers spending less than 48 hours outside Singapore) & $500 (for travellers spending at least 48 hours outside Singapore) of the value of goods bought overseas.
19. No Cap on Child’s Age when Applying for Grandparent Caregiver Relief
With effect from YA2020, working mothers may claim Grandparent Caregiver Relief in respect of a handicapped & unmarried dependent child, regardless of the child’s age, provided the applicant satisfies all other conditions.
1. Launch of Scale-up SG and Innovation Agents Programmes
Scale-up SG is actually a continuation of Start-up SG launched 2 years ago. This programme aims to help local firms to deepen their capabilities and internationalise. The Innovation Agents programme is a two year pilot to help firms obtain advice on innovation opportunities from industry professionals who have both technology expertise and business experience. More details on both these programmes will be announced soon, but eventually both programmes will in result in generating good jobs, better career opportunities and wage growth for local workers.
2. Launch of SME Co-Investment Fund III
The government is setting aside additional $100 million for the SME Co-Investment Fund III. This will continue the work of earlier SME Co-Investment Funds, with the aim at catalysing private-sector funding in Singapore. Such investments have a direct correlation to investments and employment in Singapore.
3. Launch of Enterprise Financing Scheme (EFS)
Expected to launch in October 2019, the EFS will streamline eight existing financing initiatives to help SMEs navigate between the various financing schemes.
4. Extension of the Automation Support Package (ASP) and the SME Working Capital Loan
The ASP will be extended for 2 more years to continue supporting companies in their automation, productivity and scale-up efforts. Similarly the SME Working Capital Loan will also be extended for another 2 years to continue addressing the financial needs of smaller companies, through unsecured loans, with the government sharing risks with participating financial institutions.
5. Expansion of the SMEs Go Digital Programme
Introduced in Budget 2017, this programme will now expand to include more sectors such as accountancy, sea transport, and construction, with more sectors to be included later in the year. Info-Communications and Media Development Authority (IMDA) which facilitates this programme will also be extending the range of pre-approved solutions such as artificial-intelligence (AI) infused solutions and cyber-security solutions that can be readily adopted by SMEs.
6. Extension & Enhancement of the Productivity Solutions Grant (PSG)
Introduced in Budget 2018, the PSG aims to support enterprises to adopt readily available off the shelf productivity solutions and technologies. Following Budget 2019, the PSG support level of 70% will be extended to 31 March 2023 and it will be further enhanced to include a component that supports upgrading of employees.
7. Extension of Enterprise Development Grant (EDG)
The government will be extending and enhancing the EDG support of up to 70% to 31 March 2023. EDG was introduced in Budget 2018 to help firms adjust to the impending foreign workforce policy changes.
8. Launch of Digital Services Lab (DSL)
This is a three year pilot programme that aims to address digitalization challenges in the services sector using digital capabilities. It will focus on projects with industry-wide impact, involving various stakeholders and where there are barriers to digitalization. DSL engineers and systems architects will collaborate with various industry partners to develop solutions addressing the identified problem(s). Participating companies either as users or technology solutions provider may apply for funding support of up to 70% of qualifying costs.
9. Launched of a one-stop portal
The Ministry of Trade and Industry (MTI) and relevant agencies are developing a one-stop portal to make it easier for businesses to transact with the Government. A pilot will be launched for the food services sector by the third quarter of 2019. After this, businesses will deal with one point of contact, instead of up to 14 different ones as they do today.
Helping businesses build strong partnerships in Singapore and internationally.
10. Launch of Local Enterprise and Association Development (LEAD) Programme
This programme will strengthen the government support for Trade Associations and Chambers (TACs) by developing five year roadmaps of a more strategic and longer-term approach in driving industry transformation and gain access to funding.
11. New Centres of Innovation
Two new Centres of Innovation (COIs) will be set up focusing on aquaculture and energy as part of the government’s effort to assist SMEs with technology innovation. The aquaculture COI will support growth and internationalization of local enterprises, while the energy COI aim to drive industry-led innovation in energy efficiency, renewable energy and electric mobility. These COIs will be housed in Temasek Polytechnic and Nanyang Technological University.
12. Singapore as an Innovation Node
Singapore Fintech Festival and the Singapore Week of Innovation and Technology will happen on the same week in mid-November. These events will maximise efforts to attract the global innovation community to Singapore and foster opportunities for potential collaborations.
Tax Changes for Singapore Businesses Highlighted in Budget 2019.
13. Discontinuation of Property Tax Order for Tourists Projects
This scheme has lapsed since 18 February 2019. Introduced in 1987, this scheme was aim to promote tourism in Singapore wherein approved tourism projects had their annual value computed based on 6% of the preceding year’s gross receipts, applicable for the first 5 years upon completion of the project.
14. Extension of Written Down Allowance (WDA)
WDA incurred in acquiring qualifying Intellectual Property Rights (IPRs) will be extended to cover qualifying capital expenditure acquired on or before the last day of the basis period for YA2025, instead of YA2020.
15. Extension of Income Tax Concessions for S-REITs, REITs ETFs and GST Remission for S-REITs and RBTs
Existing tax concessions for S-REITs (Singapore-listed Real Estate Investment Trusts) and REITs ETFs (Real Estate Investment Trusts Exchange-Traded Funds) will be extended to 31 December 2025. To facilitate the listing of S-REITs and RBTs (Singapore-listed Registered Business Trusts) in infrastructure, ship and aircraft leasing, the GST remission will be extended to 31 December 2025. The Monetary Authority of Singapore (MAS) will be announcing more details by May 2019.
16. Changes in Tax Incentives for Funds managed by Singapore-based fund managers
This tax incentive scheme including its concession to claim GST incurred on expenses at a fixed recovery rate, will be further refined and extended to 31 December 2024 instead of 31 March 2019.
Tax Changes for Individuals Highlighted in Budget 2019
17. Rebates on Personal Income Tax for YA2019
As part of the Bicentennial Bonus, a personal income tax rebate of 50% of tax payable, capped at $200, will be granted to all resident individual taxpayers for YA2019.
18. Tightening of GST (Goods and Services Tax) Import Relief for Tourists
GST import relief for tourists is tightened on the first $100 (for travellers spending less than 48 hours outside Singapore) & $500 (for travellers spending at least 48 hours outside Singapore) of the value of goods bought overseas.
19. No Cap on Child’s Age when Applying for Grandparent Caregiver Relief
With effect from YA2020, working mothers may claim Grandparent Caregiver Relief in respect of a handicapped & unmarried dependent child, regardless of the child’s age, provided the applicant satisfies all other conditions.
Need help especially in understanding Singapore’s Personal Tax or how the Tax Changes will impact your business, contact us today and our team of tax professionals will guide you through every step of the way.
