Singapore Issues Third COVID-19 Stimulus Package
- On April 6, 2020, the Singaporean government issued its third stimulus package valued at S$5.1 billion (US$3.6 billion).
- Named the Solidarity Budget, the package will take the country’s total relief stimulus to almost S$60 billion (US$42 billion).
- The primary aim of this latest package is to save jobs and protect livelihoods through wage subsidies and rebates on foreign worker levies, in addition to increased fiscal incentives for Singaporeans.
On April 6, 2020, the Singaporean government issued its third stimulus package valued at S$5.1 billion (US$3.6 billion). Named the Solidarity Budget, the package takes the country’s total relief stimulus to about S$60 billion (US$42 billion).
The latest package offers wage subsidies, rebates on foreign worker levies, in addition to increased fiscal incentives for Singaporeans.The first stimulus package was included in the 2020 state budget in February whereas the second stimulus package was issued on March 26, 2020. The announcement of the latest package was unveiled a day before circuit breaker measures were implemented – the closure of non-essential services until May 4, 2020 – and will mean the government has committed about 12 percent of GDP to fight the pandemic and keeping businesses afloat.
Investors should seek the help of qualified local advisors to better understand how these relief programs can benefit their business.
Cashflow and credit support for businesses
The government will waive the Foreign Worker Levy (FWL) due in May to ease cash flow for businesses during these uncertain times.
Under the FWL, businesses that hire foreign workers must pay a levy for each Work Permit holder. The levy paid is dependent on the worker’s qualifications and the number of Work Permit or S Pass holders the company has hired. The levy rates and requirements can be seen in the Ministry of Manpower’s website here.
The government will provide FWL rebates of S$750 (US$525) from the levies paid this year for each Work Permit and S Pass holder.
There is a one-month rental waiver for industrial, office, and agriculture tenants of government agencies. Further, the government will ensure property owners pass on the property tax rebates – issued in the second stimulus package – to tenants.
Finally, the government will raise its risk share for loans made under the EFS-Trade Loan, EFS-SME Working Capital Loan, and the Temporary Bridging Loan programs from 80 percent to 90 percent. This applies to the loans initiated from April 8, 2020, to March 31, 2021.
Enhancing Jobs Support Scheme
The government will enhance the Jobs Support Scheme (JSS) from the previous stimulus package by paying 75 percent on the first S$4,600 (US$3,223) of monthly salaries for each local employee for May 2020. This is due to the extension of the government’s lockdown measures (circuit breaker).
Further, the government will extend the JSS payout to include shareholders and directors of a company. This is only eligible for businesses that applied on or before April 20, 2020, and the shareholder or director should not earn more than S$100,000 (US$70,000).
Assisting self-employed persons
The budget will include more self-employed persons (SEPs) to be eligible for financial relief. There is now automatic inclusion for SEPs who earn a ‘small income’ to gain the SEP Income Relief Scheme (SIRS).
Through the Solidarity Budget, SEPs will receive three quarterly cash handouts worth S$3,000 (US$2,100) each for the months of May, July, and October 2020.
More financial assistance for Singaporeans
Singaporeans aged 21 and above in 2020 will get an additional cash payout of S$300 (US$210). Singaporean parents with at least one Singaporean child aged 20 or below will also receive a cash payout of S$300 (US$210).
Singaporeans aged 50 and above in 2020 will receive S$100 (US$70).
(The article was originally published on April 8, 2020 and was last updated on April 24, 2020 to include the latest developments.)