The Government in Singapore has announced a total of 4 budgets within a short span of 4 months from February to May 2020, dedicating S$92.9 billion to help businesses and individuals amid the COVID-19 pandemic.
This article summarizes the various support for business that would help you manage your cash flow needs. The budgets are aimed at providing support to business on the 3Cs- cash flow, cost and credit, as well as helping business to embark on digital transformation to ensure viability of the business for the future.
Under the Job Support Scheme (JJS), the government will co-fund between 25% to 75% of the first S$4,600 of gross monthly wages paid to each local employee (Singapore Citizens and Permanent Residents) through cash payout.
There is no need to apply. All employers who have made CPF contributions for their local employees would automatically qualify.
To ease cashflow for businesses, all companies with corporate income tax payments due in April, May and June 2020 would be granted 3-month deferment. Payment would start from July 2020.
There is no need to apply. The deferment would be granted automatically.
The government will support employers who hire foreigner (S Pass or Work Permit holder) by waiving the Foreign Worker Levy (FWL) and providing rebate as follow:
*Jun and July 2020 FWL waiver and rebate are only for business that cannot resume operations on-site after circuit breaker is lifted ie construction, marine and offshore, process sectors etc. Levy rates would be restored from August 2020 onwards, or when workers resume to work, whichever is earlier.
There is no need to apply. Employers who have paid up to December 2019’s FWL levy in full would be automatically eligible.
The government has expanded the rental relief in the Fortitude Budget to help SMEs with rental cost through the following:-
Duration of Rental Relief | ||
Type of Relief | Qualifying Commercial Properties (e.g. Shops) | Industrial / Office Properties |
(A) Rental Relief for eligible SMEs (supported by Government Assistance)* | ||
Rental Waiver | 2 months (for April-May 2020) | 1 month (for April 2020) |
(B) Additional Rental Relief for Eligible SMEs (bourne by Landlord)^ | ||
Rental Waiver | 2 months (for June-July 2020) | 1 month (for May 2020) |
Total | 4 months (for April-July 2020) | 2 months (for April-May 2020) |
The Government has announced further enhancement to the financing schemes to ensure businesses continue to have access to credit.
Temporary Bridging Loan is for businesses affected by the Covid-19 outbreak, this loan would alleviate your cash flow needs and help your business stay afloat.
SME Working Capital Loan would help to finance your operational cash flow needs.
Question: What is the difference between Enterprise Financing Schemes – SME Working Capital Loan (EFS-WCL) and Temporary Bridging Loan Programme (TBLP)?
Answer: Government has introduced TBLP in response to the Covid-19 outbreak, to help businesses manage their immediate cash flow needs. You can borrow up to S$5 million under TBLP, with interest rate capped at 5% per annum.
Under EFS-WCL, the maximum loan quantum is S$1 million with no cap on interest rate. If you require more financing beyond TBLP ie more than S$5 million financing, you may apply to EFS-WCL for additional financing up to S$ 1 million.
Trade Loan would help to support your trade financing needs, including financing of short-term import, export and guarantee needs.
Loan Insurance Scheme is a government risk-sharing scheme that helps you obtain trade financing.
Question: What is the difference between Enterprise Financing Schemes – Trade Loan (EFS-TL) and Loan Insurance Scheme (LIS) given that both are used to finance trade needs?
Answer: EFS-TL compliments LIS by insuring loans that are beyond the capacity of the LIS insurers, up to a limit of S$10 million.
To continue encouraging startups and sustaining their innovation, the government has set aside following amount:-
Apart from helping business on the 3Cs – cash flow, cost and credit, the Government is also strongly supporting business to go digital as a way to move forward and emerge stronger after the pandemic.
The Government would allocate more than S$500 million to support digital transformation of business in the following aspects:-
1. Digital Resilience Bonus – Bonus payout of up to S$10,000 for food services and retail enterprises that adopt PayNow Corporate and e-invoicing, plus digital solutions in one or more of these categories:-
2. Adoption of e-payment – Bonus payout of up to S$1,500 (S$300 per month, over a period of 5 months) for stallholders in hawker centers, wet markets, coffee shops, industrial canteens that adopt the e-payment solutions. The Government will also bear the transaction fees until 31 December 2023.
3. National Innovation Challenge – A total of 6 challenges would be launched on the Open Innovation Platform,with a total of S$90,000 of prize money to be awarded. These are the critical problems that businesses are grappling with as a result of COVID-19, and corporations, startups and others in the private sector are encouraged to come forward to form partnerships to provide industry-led solutions and government will provide support for this innovation drive.
We encourage our clients and all business owners to consider the opportunities presented by the available reliefs and financing support to keep your business going and emerge stronger after the pandemic. If there is one key learnings from COVID-19 that businesses can draw upon is that digitalisation is the way to go for future survival and growth.
Digitalisation involves integrating digital technology into all areas of the business, implementing digital strategy where processes and capabilities are constantly evolving based on changes in circumstances or inputs from customers, using new capabilities to continue creating value and delivering better experience to customers, making business decision proactively based on intelligence and act swiftly in dynamic situations.
Contact us if you require more information regarding the financial reliefs or if you want to start digitizing your accounting and administrative processes now.
Gone are the days where you have to engage different companies just to have an update on your accounting, tax, corporate secretary matters separately. At Chartsworth, we are your one-stop corporate service provider. We would assign an expert accountant to be your main point of contact, ensuring effective communication and increased efficiency in our dealings.
Ditch paperwork and traditional accounting software. We use cloud accounting, offering greater accessibility and scalability to your business. Our monthly accounting plans come with a free XERO cloud accounting subscription. Enjoy having your accounting information at your fingertips to help you make quick and better business decisions.
With Chartsworth, you no longer need to worry about sorting out your monthly financials and missing your compliance deadlines. We would take care of these essential but time-consuming aspects so that you could focus on growing revenue and taking your business to new heights.
The CA (Singapore) designation remains the highest form of professional designation conferred by the Institute of Singapore Chartered Accountant (ISCA). Our team is equipped with up-to-date knowledge and financial expertise to offer advice to your business.
Chartsworth Pte. Ltd.
60 Paya Lebar Rd,
#05-04 Paya Lebar Square,
Singapore 409051