Budget projections for the year of 2021 were delivered in Singapore on the 16th of February. As a COVID-19 support initiative, the Singapore government allocated almost S$100 billion across five budget schemes in conjunction with the standard expenditures of the prior year. The budget statement also disclosed that the fiscal year of 2020 had presented an immense budget deficit to Singapore, and correspondingly the roughest recession the country had experienced since acquiring self-governance.
For the 2021 budget, core rates such as corporate tax rate, GST rates, and personal income tax rate will remain as they are.
Highlights of the budget are as follows:
GST (Tax on Goods and Services):
- Past predictions in the budget statement from 2018 anticipated that a need will arise for the GST rate to be increased by 2% within the 2021-2025 year bracket. In light of the current economic state of the nation, the GST increase will not occur in 2021, and will likely rather take effect within the four succeeding years.
- Imported goods of low-value are currently not liable to GST, and will remain exempt likely until January 1st, 2023.
- Tax deductions of up to 250% will continue to be applicable to donations to IPC’s (Institutions of Public Character) until the end of the 2023 fiscal year.
- As a transportation support scheme, Singaporean government will offer:
- 60% rebate on road tax for gasoline-operated motorcycles, effective for one year beginning August 1st, 2021
- Small motorcycle owners will be eligible to receive a cash allowance of SGD 50 or SGD 80 annually, contingent upon the capacity of their engine
- Gas-powered car owners will also be permitted a one-year rebate on road tax of 15%, beginning August 1st, 2021
- Singaporean government will provide a COVID-19 Resilience Package consisting of SGD 11 billion, in efforts to protect public health while allowing for a safe re-opening, and to aid workers, firms, and other sectors still financially impacted by the virus
- Sector of COVID-19 Resilience Package in support of workers and companies
- Portion of the 2021 Budget will continue to be allocated to the JSS (Job Support Scheme)
- Other plans included in the SGUnited Jobs and Skills Package will be extended throughout 2021
- The government will allot SGD 24 billion over the coming three years to supporting companies and workers returning to office
- Government will fund the below platforms:
- The OIP (Open Innovation Platform) will help connect companies and agencies facing hardships with vendors with potential solutions
- The Corporate Venture Launchpad will co-finance corporations’ initiatives to develop new ventures
- The Global Innovation Alliance (GIA) will facilitate collaboration between Singapore and vital innovation centers across the globe
- The Enterprise Financing Scheme – in which the government holds up to 70% of the liability on qualified loans with partnered firms – will be expanded. Furthermore, the cap on supported loan amounts will be raised by 3 million, putting the new cap at SGD 8 million
- Emerging Technology Program – providing financial support to the technology industry will be introduced
- Companies will gain access to IT specialists to acquire digital solutions with the CTO as a Service initiative
- Singaporean government will expand on support to existing enterprise schemes, up to 80% until March of next year
- The Wage Credit Scheme will be extended for an additional 12 months, providing financial support at 15%
- A Household Support Package will be implemented, offering supplementary aid to families
- Digital Leaders Program will be introduced, providing hiring and development support to companies in the digital realm
Tax rates for core sectors including corporate tax rate, GST rates, and personal income tax rate will not change for the 2021 fiscal year. Various deductions will be applicable throughout the year, and Singapore government officials have developed various COVID-19 relief plans and initiatives which will also be extended throughout the year.
The information shared in this article provides general information only, and not professional advice. If you need to consult on international expansion of your business or have specific questions about local policy compliance, contact us today to speak to one of our experts.
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